City and County of San Francisco v. United Assn. of Journeymen etc. of U.S. & Canada

• Decision Date: 27 October 1986
• Docket Number: S.F. 24946
• Citation: 230 Cal.Rptr. 856,726 P.2d 538,42 Cal.3d 810
• Court: California Supreme Court
• Parties: , 726 P.2d 538, 123 L.R.R.M. (BNA) 2841, 55 USLW 2254 CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Respondent, v. UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the PLUMBING AND PIPEFITTING INDUSTRY OF the UNITED STATES AND CANADA, LOCAL 38, Defendant and Appellant.

Page 856

230 Cal.Rptr. 856

42 Cal.3d 810, 726 P.2d 538, 123 L.R.R.M. (BNA) 2841,

55 USLW 2254

CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Respondent, v. UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the PLUMBING AND PIPEFITTING INDUSTRY OF the UNITED STATES AND CANADA, LOCAL 38, Defendant and Appellant.

S.F. 24946.

Supreme Court of California,

In Bank.

Oct. 27, 1986.

George Agnost, City Atty., Philip S. Ward, Chief S. Ward, Chief Deputy City Atty., and Steven A. Diaz, Deputy City Atty., for plaintiff and respondent.

Joseph L. Alioto and Lawrence Alioto, San Francisco, for defendant and appellant.

BROUSSARD, Justice.

In County Sanitation Dist. No. 2 v. Los Angeles County Employees Assn. (1985) 38 Cal.3d 564, 214 Cal.Rptr. 424, 699 P.2d 835, cert. denied, 474 U.S. 995, 106 S.Ct. 408, 88 L.Ed.2d 359 (hereafter County Sanitation ), we held that a public employees' strike is illegal only if it poses an imminent threat to public health or safety. (P. 592, 214 Cal.Rptr. 424, 699 P.2d 835.) Our opinion specifically reserved the question whether an employer could recover damages in tort for an illegal strike. (Id., at p. 592, fn. 40, 214 Cal.Rptr. 424, 699 P.2d 835.) ¹ We address that question today, and conclude that, until the Legislature provides otherwise, the maintenance of an illegal strike is not a tort for which damages may be recovered. We disapprove Pasadena Unified School Dist. v. Pasadena Federation of Teachers (1977) 72 Cal.App.3d 100, 140 Cal.Rptr. 41 (hereafter Pasadena ), the only decision in the country to uphold a damage award in such a setting, and the decision on which the trial court relied in awarding $4,080,000 in damages to the City of San Francisco in the present case.

On March 11, 1976, defendant, Local 38 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, and every other San Francisco building trades union went on strike against plaintiff city. About two weeks after the strike began, the city successfully moved for a preliminary injunction against the striking unions and their leaders. The unions appealed from this order. Before the appeal was decided, the strike settled. The Court of Appeal nevertheless retained the case as one presenting recurrent issues of public importance. (City and County of San Francisco v. Evankovich (1977) 69 Cal.App.3d 41, 45, fn. 2, 137 Cal.Rptr. 883 (hereafter Evankovich ).)

The principal issue argued in the Evankovich appeal was whether the injunction was affected by the enactment of Code of Civil Procedure section 527.3. The Court of Appeal held that this section, which limits the right of a court to enjoin a strike, was inapplicable to strikes by public employees. (Evankovich, pp. 50-53, 137 Cal.Rptr. 883.) Before reaching that issue, however, the Court of Appeal rejected the union's argument that its strike was conduct protected under the First Amendment, stating that "in the absence of an authorizing statute, public employees do not have a right to strike." (Pp. 47-48, 137 Cal.Rptr. 883.) The unions sought to distinguish prior cases on the ground that there was no showing that the strike was violently conducted or induced violence, but the court rejected that distinction, describing the enjoined conduct, picketing and advocacy of a strike against the city, as conduct seeking an unlawful object. (P. 49, 137 Cal.Rptr. 883.) Thus the Evankovich court, by clear implication, held the San Francisco strike illegal.

Shortly before the Court of Appeal decision came down, the city filed the present action for tort damages allegedly suffered as a result of the strike. All of the unions except defendant signed consent decrees, agreeing to refrain from engaging in a strike for five years in return for dismissal from the city's tort action.

The case went to trial against defendant. The court instructed the jurors that the strike was illegal, and directed them to find defendant liable if they found that either Local 38 conspired with other labor unions to engage in a public employee strike, or was a concurrent tortfeasor with other labor unions engaged in a public employee strike. Rejecting the union's claim that wages and salaries saved should be set off against damages incurred, the court instructed that damages should be awarded for lost revenues, increased operating expenses, and employee overtime, but that "salaries of striking workers, paid or unpaid, have no bearing on ... the subject of damages." The jury then returned a verdict for the city of $4,080,000 in compensatory damages. No punitive damages were sought.

Defendant appealed. Before the appeal was decided, we held in County Sanitation that public employee strikes were illegal only if they endangered the public health or safety. The Court of Appeal, however, found the union collaterally estopped by the Evankovich decision from challenging the finding that the San Francisco strike was illegal. The court then relied on Pasadena to uphold the damage award, rejecting the claimed deduction for wages and salaries saved as "inequitable." ²

The petition for review presented three issues: (1) whether the union is collaterally estopped to deny the asserted illegality of the strike, (2) the availability of damages as a remedy for an illegal strike, and (3) the measure of damages. Our conclusion as to the second issue--that an illegal strike is not, in itself, a sufficient basis for the award of tort damages--is conclusive of the case. We therefore do not decide the issues of collateral estoppel or the measure of damages.

Although many states prohibit public employee strikes generally, and virtually all states prohibit such strikes under certain circumstances (see County Sanitation, 38 Cal.3d 564, 569, 214 Cal.Rptr. 424, 699 P.2d 835), very few decisions discuss whether such a strike gives rise to a cause of action for damages. Pasadena appears to be the only reported appellate decision in the country upholding a damage award to a public employer in the absence of specific legislation authorizing such an award. ³ We therefore begin our discussion with an analysis of that opinion.

The Pasadena Unified School District sought damages against a local teachers' union for loss occasioned by a one-day work stoppage. The trial court upheld the union's demurrer, and the school district appealed. Reversing the judgment, the Court of Appeal first said, in accord with then-current Court of Appeal authority, that public employee strikes were unlawful. It then held that damages could be recovered on either of two theories: (1) "tortious inducement of breach of contract," and (2) "direct liability for harms resulting from unlawful acts." (72 Cal.App.3d 100, 111, 140 Cal.Rptr. 41.)

With regard to the first theory, the Court of Appeal noted that all of the teachers were certificated employees working under contract. Although the contracts contained no explicit prohibition against strikes, the court reasoned that because (in its view) all such strikes would be illegal, the obligation not to strike was an implicit term of the contract. Consequently, it concluded, the allegation that the union induced the teachers to breach this term of their contracts stated a cause of action for damages.

Pasadena 's second theory was based upon the principle that "[t]he law of this state imposes upon everyone the duty 'to abstain from injuring the person or property of another, or infringing upon any of his rights.' (Civ.Code, § 1708.) There is a breach of such legal duty when one who performs an act not authorized by law ... causes a substantial material loss to another. That breach constitutes the commission of a tort ... for which an action in damages will lie." (Pasadena, p. 112, 140 Cal.Rptr. 41, quoting Garmon v. San Diego Bldg. Trades Council (1958) 49 Cal.2d 595, 606, 320 P.2d 473.) ⁴ Since the union aided and abetted an unlawful act causing material injury to the district, the court concluded it was liable in tort.

In the present case, the city does not allege a contractual relationship with the striking workers, or assert a cause of action for tortious interference with contract. The case went to the jury solely on the theory that an illegal strike was tortious per se, and that a union which conspired to strike or aided a strike was a joint tortfeasor liable for damage caused by the strike.

This theory (which cases refer to as a theory of prima facie tort), has been rejected by other jurisdictions. In Lamphere Sch. v. Lamphere Fed. of Teachers (1977) 400 Mich. 104, 252 N.W.2d 818, the Michigan Supreme Court considered a suit by a school district seeking damages from striking teachers and their union. A Michigan statute prohibited public employee strikes, but provided only for injunctive relief, plus discipline or discharge of strikers. The court declined to provide a common law remedy, stating that in "states which have statutes prohibiting public employee strikes, the principle permitting a cause of action in tort for damages has not been judicially adopted." (252 N.W.2d p. 828; emphasis added.) In City of Fairmont v. Retail, Wholesale, etc. (W.Va.1980) 283 S.E.2d 589, the West Virginia Supreme Court of Appeals reviewed a suit by the city against striking hospital workers. Finding no cause of action, the court rejected the prima facie tort theory of Pasadena, and distinguished Pasadena 's cause of action for interference with contract on the ground that the hospital workers had no written employment contracts.

The cases involving suits by third parties injured by a strike also reject the theory of prima facie tort. Three decisions have rejected damage suits by businesses harmed by transportation workers' strikes. (Jamur Productions Corp. v. Quill (N.Y.Sup.Ct.1966) 51 Misc.2d 501, 273 N.Y.S.2d 348; Burns Jackson Miller etc. v. Lindner (N.Y.Ct.App.1983) 59 N.Y.2d 314, 464 N.Y.S.2d 712, 451 N.E.2d 459; Burke & Thomas, Inc. v....