Cobb v. O'Connell

• Decision Date: 25 October 2005
• Docket Number: No. A109101.,A109101.
• Citation: 36 Cal.Rptr.3d 170,134 Cal.App.4th 91
• Court: California Court of Appeals Court of Appeals
• Parties: Paul COBB et al., Plaintiffs and Appellants, v. Jack O'CONNELL, Defendant and Respondent.

36 Cal.Rptr.3d 170

134 Cal.App.4th 91

Paul COBB et al., Plaintiffs and Appellants, v. Jack O'CONNELL, Defendant and Respondent.

No. A109101.

Court of Appeal, First District, Division 5.

October 25, 2005.

Certified for Partial Publication.^*

As Modified November 18, 2005.

Daniel Mark Siegel, Oakland, CA, for Plaintiffs-Appellants.

Amy Elizabeth Bisson-Holloway, Dept. of Education/Legal Ofc., Sacramento, CA, for Defendant-Respondent.

STEVENS, J.

Appellants are Oakland residents and taxpayers, who contend that the California Legislature's passage of special remedial legislation in 2003, which was designed to save the Oakland schools from financial insolvency, violated the "home rule" provisions of the California Constitution and the Oakland City Charter. We affirm the trial court's ruling, which rejected appellants' contentions. In the published portions of this opinion, we address appellants' claims of a conflict with provisions of the California Constitution and the Oakland City Charter. In the final, unpublished portion of this opinion, we address appellants' claims of a waste of public funds.

I. FACTS AND PROCEDURAL HISTORY

We draw the relevant facts from appellants' first amended complaint. During the summer of 2002, the Oakland School District discovered that it had incurred a deficit of $31 million, due to errors in estimating expenses, failures of oversight, an outdated computer system, and other locally occurring problems. The Oakland schools also faced a projected deficit for the next year of over $50 million, although steps were put in place to reduce this projected deficit to $25 million in that year, and to achieve a projected balanced budget the following year.

The State of California took action to insure that this fiscal crisis in the Oakland schools did not deprive students of their educational opportunities. The California Legislature passed Senate Bill No. 39 (2003-2004 Reg. Sess.), Stats. 2003, ch. 14 (SB 39), emergency legislation authored by Senator Perata of Oakland in 2003.

In summary, SB 39 provides additional emergency funding to the Oakland schools in the total sum of $100 million. The legislation also provides that control of the Oakland schools would temporarily be assumed by the state.¹ The state's Superintendent of Public Instruction, respondent Jack O'Connell, was directed to appoint a state administrator to run the Oakland school system, for at least two fiscal years after the appointment of the administrator, or until the projected completion of a specified "improvement plan" to resolve the fiscal crisis and return the district to solvency, as per section (5)(e) of SB 39.

Pursuant to the enactment of SB 39, a state-appointed administrator assumed control of the Oakland schools in June 2003, displacing the supervisory control formerly exercised by the elected governing board of the Oakland school district, which continues to exist and act in an advisory role.

Appellants alleged that SB 39, by allowing a temporary state takeover of the local Oakland schools, constituted a violation of the "home rule" provisions of the California Constitution which provide for local control over certain local governmental functions, and conflicted with provisions of the Oakland City Charter providing for an elected school board.² Appellants' complaint further alleged that the respondent State Superintendent of Public Instruction was engaged in the "illegal waste and expenditure of public funds" by implementing the provisions of SB 39.

The trial court rejected appellants' claims as a matter of law, sustaining without leave to amend defendants' general demurrer, and entering judgment on their behalf.

II. DISCUSSION

A. STANDARD OF REVIEW

A demurrer "tests the legal sufficiency of the complaint . . . ." (Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497, 57 Cal.Rptr.2d 406.) On appeal from a dismissal following such an order, we assume the truth of all facts properly pleaded in the complaint and its exhibits or attachments, as well as those facts that may fairly be implied or inferred from the express allegations. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403, 44 Cal.Rptr.2d 339.) "We do not, however, assume the truth of contentions, deductions, or conclusions of fact or law." (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125, 271 Cal.Rptr. 146, 793 P.2d 479.)

In reviewing such a ruling, we look "only to the face of the pleadings and to matters judicially noticeable . . . ." (Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 239, fn. 2, 244 Cal.Rptr. 764, italics omitted.) We are "not bound by the trial court's construction of the complaint . . . ." (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958, 93 Cal.Rptr.2d 413.) Rather, we independently evaluate the complaint, construing it liberally, giving it a reasonable interpretation, if possible, and reading it as a whole, while viewing its parts in context. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58 (Blank).) We must determine de novo whether the factual allegations of the complaint are adequate to state a viable cause of action under any legal theory. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38, 77 Cal.Rptr.2d 709, 960 P.2d 513.)

B. THE DEMURRER WAS PROPERLY SUSTAINED.

Our analysis starts with the "home rule" provisions of the California Constitution.

As a charter city recognized in the California Constitution (Cal. Const., art. XI, §§ 2, 3), Oakland is empowered to govern its own "municipal affairs." In this regard, article XI, section 5, subdivision (a), reads in relevant part: "It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws." This constitutional "home rule" doctrine reserves to charter cities the right to adopt and enforce ordinances, provided the subject of the regulation is a "municipal affair" rather than being a subject of "statewide concern." (Johnson v. Bradley (1992) 4 Cal.4th 389, 399, 14 Cal.Rptr.2d 470, 841 P.2d 990 (Johnson); accord, Traders Sports, Inc. v. City of San Leandro (2001) 93 Cal.App.4th 37, 45, 112 Cal.Rptr.2d 677 (Traders).)

Appellants maintain that SB 39's requirement that a state-appointed administrator temporarily manage the Oakland schools conflicts with the "home rule" doctrine, as well as with provisions of the Oakland City Charter providing for the election of a local school board.

The relevant case law has identified the steps we must take in resolving this controversy. "First, a court must determine whether there is a genuine conflict between a state statute and a municipal ordinance. [Citations.] Only after concluding there is an actual conflict should a court proceed with the second question; i.e., does the local legislation impact a municipal or statewide concern?" (Barajas v. City of Anaheim (1993) 15 Cal.App.4th 1808, 1813, 19 Cal.Rptr.2d 764; see also Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 364, 87 Cal.Rptr.2d 654, 981 P.2d 499; Rider v. City of San Diego (1998) 18 Cal.4th 1035, 1054, 77 Cal.Rptr.2d 189, 959 P.2d 347.) Finally, if a genuine conflict is presented and the state statute qualifies as a matter of statewide concern, "we next consider whether it is both (i) reasonably related to the resolution of that concern, and (ii) `narrowly tailored' to limit incursion into legitimate municipal interests." (Johnson, supra, 4 Cal.4th at pp. 404, 406, fn. 17, 14 Cal.Rptr.2d 470, 841 P.2d 990.)

1. Is There a Genuine Conflict?

As we have noted, under California's Constitution, charter cities have been specifically granted the power to manage certain of their own affairs without interference from the state Legislature. (Cal. Const., art. XI, § 5, subd. (a).) In particular, subdivision (b) of this constitutional provision directly grants to charter cities the power and authority to legislate in four "core" areas "that are by definition, `municipal affairs.' " (Johnson, supra, 4 Cal.4th at p. 398, 14 Cal.Rptr.2d 470, 841 P.2d 990.) When a charter city's enactment falls within one of these core areas, it supersedes any conflicting state statute. (See, e.g., Ector v. City of Torrance (1973) 10 Cal.3d 129, 132-133, 109 Cal.Rptr. 849, 514 P.2d 433.) The "conduct of city elections" is one of the few specifically enumerated core areas of autonomy for home-rule cities. (Cal. Const., art. XI, § 5, subd. (b).) Additionally, Article IX section 16, subdivision (a) authorizes a charter city to provide for "the manner in which . . . and the terms for which the members of boards of education shall be elected or appointed . . . ."

Appellants claim that SB 39 conflicts with those provisions of the Oakland charter calling for the election of the Oakland school board. We perceive no such genuine, actual or direct conflict. The Oakland school board continues to be elected as it always was before the emergency legislation, and the hiatus in the exercise of its ultimate responsibility is only temporary, during which period the board continues to serve an advisory role. It cannot be said that SB 39 interferes with the election of members of the school board.

Most certainly, SB 39 does provide that the management of the school district is, temporarily, in the hands of a state appointed administrator until the present fiscal crisis may be dealt with and the district may be returned to definite solvency. But this temporary administration and goal of solvency does not conflict with any provision of the Oakland charter, or prevent the election of a local school board in the manner specified by the Oakland charter. (Cf. Traders, supra, 93 Cal.App.4th at p. 45...