Coan v. State of California

• Court: United States State Supreme Court (California)
• Writing for the Court: CLARK; MOSK; SULLIVAN; WRIGHT; TOBRINER
• Citation: 11 Cal.3d 286,520 P.2d 1003,113 Cal.Rptr. 187
• Decision Date: 19 April 1974
• Parties: , 520 P.2d 1003, 21 Wage & Hour Cas. (BNA) 720 James COAN et al., Petitioners, v. The STATE of California et al., Respondents. Sac. 7987.

Page 187

113 Cal.Rptr. 187 11 Cal.3d 286, 520 P.2d 1003, 21 Wage & Hour Cas. (BNA) 720 James COAN et al., Petitioners,
v.
The STATE of California et al., Respondents. Sac. 7987. Supreme Court of California,
In Bank. April 19, 1974.

[11 Cal.3d 287]

Page 188

[520 P.2d 1004] Robert J. Sullivan, Loren E. McMaster, Allen R. Link and Michael D. Stump, Sacramento, for petitioners.

Richard K. Turner, Washington, D.C., and Stephen S. Boynton, Sacramento, as amici curiae on behalf of petitioners.

Evelle J. Younger, Atty. Gen., Willard A. Shank, Asst. Atty. Gen., and Talmadge R. Jones, Deputy Atty. Gen., for respondents.

Irving Jaffe, Acting Asst. Atty. Gen., D. Dwayne Keyes, U.S. Atty., Brewster Q. Morgan, Asst. U.S. Atty., William E. Nelson and William C. White, Attys., Economic Stabilization Section, Civil Division, U.S. Dept. of Justice, Washington, D.C., as amici curiae.

CLARK, Justice.

A state employee, on behalf of himself and others, and the California State Employees' Association petition for peremptory writ of[11 Cal.3d 288] mandate compelling California officials to prepare a payroll and to pay wage increases in accordance with the California

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[520 P.2d 1005] Budget Act of 1973. (Stats.1973, ch. 129.) We issued an alternative writ. ¹

The Budget Act of 1973 includes appropriations for an average increase in state salaries of 11.5 percent. ² However, the Cost of Living Council (council) filed notice of challenge and an order temporarily restraining payment of the increase. Following hearing on 29 August 1973, the council allowed only a 7 percent increase, and the California Director of Finance promptly filed his objections.

The question whether the council is authorized by Congress to limit the state salaries was not raised at the council hearing. Rather, California argued that state salaries are based on comparable jobs in other sectors of the economy, that lengthy proceedings to determine comparability create a 4- to 16-month lag, that the salary increase proposed by the Budget Act of 1973 will not bring state employee salaries up to other government and private sector levels, and that, when viewed over a period of years, the state increases are not inconsistent with council standards. It was further pointed out that when Governor Reagan vetoed a pay raise for budgetary reasons in 1971, he recognized the raise was warranted and would be restored when funds became available.

Petitioners contend the council is not empowered by statute to regulate the internal affairs of a sovereign state and therefore may not control salaries paid state employees. ³ Respondents demur, claiming exclusive jurisdiction lies in the district courts of the United States under section 211(a) of the Economic Stabilization Act of 1970 (the act) ⁴ and that a defect in parties exists by failure to join the council. In addition to claiming lack of jurisdiction, the United States of America asserts that Congress empowered the council to regulate state salaries.

The Act

Section 203(a) of the act authorizes the President to stabilize wages, section 204 permitting him to delegate such power to boards or commissions. [11 Cal.3d 289] Section 209 allows the Attorney General to enforce the act through restraining order and injunction in the federal courts.

Section 210 provides: 'Any person suffering legal wrong because of any act or practice arising out of this title, or any order or regulation issued pursuant thereto, may bring an action in a district court of the United States, without regard to the amount in controversy, for appropriate relief, including an action for a declaratory judgment, writ of injunction (subject to the limitations in section 211), and/or damages.'

Section 211 provides: 'The district courts of the United States shall have exclusive original jurisdiction of cases or controversies arising under this title, or under regulations or orders issued thereunder, notwithstanding the amount in controversy; except that nothing in this subsection or in subsection (h) of this section affects the power of any court of competent jurisdiction to consider, hear, and determine any issue by way of defense (other than a defense based on the constitutionality of this title or the validity of action taken by any agency under this title) raised in any proceeding before such court. If in any such proceeding an issue by way of defense is raised based on the constitutionality of this title or the validity of agency action under this title, the case

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[520 P.2d 1006] shall be subject to removal by either party to a district court of the United States in accordance with the applicable provisions of chapter 89 of title 28, United States Code (chapter 89 of Title 28).'

Section 211 further provides a Temporary Emergency Court of Appeals with exclusive jurisdiction over appeals from district courts in cases arising under the act.

Subject Matter Jurisdiction

We are satisfied that when sections 209, 210, and 211 are read together (as they must be), they do not preclude jurisdiction over this action by the California courts.

Section 209 only provides for federal jurisdiction in actions by the Attorney General. Therefore it does not provide federal jurisdiction in this case.

Section 210, providing for federal jurisdiction in litigation brought by individuals, may not be interpreted as providing for federal jurisdiction in actions by them against a state. The decision at the last term in employees of Dept. of Public Health & Welf. v. Department, etc., Missouri (1973), 411 U.S. 279, 93 S.Ct. 1614, 1618, 36 L.Ed.2d 251 is controlling.

In that case employees sought overtime compensation from Missouri[11 Cal.3d 290] under the Fair Labor Standards Act. Although Congress had expressly manifested its intent to bring the state employees involved within the substantive provisions of the statute, the United States Supreme Court held that, in the absence of express language providing that states were subject to the federal court remedies given employees generally, Congress did not intend states to be subject to those remedies. Similarly, here the absence of express provision for actions against a state by persons suffering legal wrong requires the conclusion that Congress never intended section 210 to authorize federal jurisdiction in actions by such persons against a state.

Since neither section 209 nor section 210 may be read as providing federal court jurisdiction for the instant action, section 211 may not then be interpreted as mandating exclusive federal jurisdiction. Coming immediately after two sections granting jurisdiction to the federal courts, section 211, providing for exclusive jurisdiction in the federal courts, must be read in the light of the preceding sections. It would be unreasonable to conclude that an action is restricted to the federal court when the federal court has not been given jurisdiction. Any doubt is dispelled by the crucial words in the three sections being almost identical: 'Order or regulation under this title' (§ 209); 'arising out of this title or any order or regulation issued pursuant thereto' (§ 210); and 'arising under this title, or under regulations or orders issued thereunder' (§ 211).

Were not the statutory pattern so clear, practical considerations would in any event require the conclusion that Congress did not intend to preclude state court jurisdiction over the instant action. The absence of state jurisdiction would mean that state employees would be unable to sue their state to recover salaries when the act has been placed in issue.

An unconsenting state is immune from federal court suits brought by its own citizens and citizens of other states. (U.S.Const., Amend. XI; Edelman v. Jordan (1974) --- U.S. ---, 94 S.Ct. 1347, 39 L.Ed.2d 662; Employees of Dept. of Public Health & Welf. v. Department, etc., Missouri, supra, 93 S.Ct. 1614, 1616; Hans v. Louisiana (1890) 134 U.S. 1, 9 et seq., 10 S.Ct. 504, 33 L.Ed. 842.) Although consent to federal court suit may be implied on the basis of interstate activities by a state, the implication of state consent may not be founded upon an act 'wholly within its own sphere of authority.' (Parden v. Terminal R. Co. (1964) 377 U.S. 184, 196, 84 S.Ct. 1207, 1215, 12 L.Ed.2d 233; Employees of Dept. of Public Health & Welf. v. Department, etc., Missouri, Supra, 93 S.Ct. 1614, 1617.) Since that sphere encompasses the activities of most state employees, they are precluded from suing in court. It does not appear reasonable to imply an intent to Congress to deprive

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[520 P.2d 1007] the[11 Cal.3d 291] employees of their right to sue in state courts, thereby denying them a forum in cases where the issues include council regulations.

It should also be pointed out that, as we shall see, the substantive provisions of the act are not applicable to state salaries, and, although not necessarily determinative, this provides a further reason to conclude the exclusive jurisdiction provisions of section 211 are not applicable here. ⁵

Original Jurisdiction

Because the instant case presents an important issue of federal-state relationship, is of importance to numerous persons including all state employees, and affects the public fisc and the state's ability to compete in the labor market, we deem it appropriate to exercise our original jurisdiction pursuant to article VI, section 10 of the California Constitution. (San Francisco United School District v. Johnson (1971) 3 Cal.3d 937, 944--945, 92 Cal.Rptr. 309, 479 P.2d 669; County of Sacramento v. Hickman (1967) 66 Cal.2d 841, 845, 59 Cal.Rptr. 609, 428 P.2d 593.)

Although a claim for payment of salary is in effect a money claim, mandamus is a proper remedy where the dispute concerns the proper construction of a statute or ordinance giving rise to the official duty to pay the salary claim. (Tevis v. City & County of San Francisco (1954) 43 Cal.2d 190, 198, 272 P.2d 757.) No reason appears to...