County of Nevada v. Macmillen

• Decision Date: 17 June 1974
• Docket Number: S.F. 23108
• Citation: 11 Cal.3d 662,114 Cal.Rptr. 345
• Court: California Supreme Court
• Parties: , 522 P.2d 1345 COUNTY OF NEVADA et al., Plaintiffs and Respondents, v. Ronald L. MacMILLEN, as District Attorney, etc., Defendant and Appellant. In Bank

Page 345

114 Cal.Rptr. 345

11 Cal.3d 662, 522 P.2d 1345

COUNTY OF NEVADA et al., Plaintiffs and Respondents, v. Ronald L. MacMILLEN, as District Attorney, etc., Defendant and Appellant.

S.F. 23108.

Supreme Court of California,

In Bank.

June 17, 1974.

As Modified June 20, 1974.

Ronald L. MacMillen, Dist. Atty., and John H. Darlington, Asst. Dist. Atty., for defendant and appellant.

Kenneth J. Guido, Jr., as amicus curiae on behalf of defendant and appellant.

Leo J. Todd, County Counsel, and Brian A. Bishop, Deputy County Counsel, Grass Valley, for plaintiffs and respondents.

BURKE, Justice.

In this declaratory relief action, plaintiffs assert that California's new conflict of interest law (Gov.Code, § 3600 et seq.), enacted in 1973, is unconstitutional. In 1970 this court struck down a similar statute in City of Carmel-By-The-Sea v. Young, 2 Cal.3d 259, 85 Cal.Rptr. 1, 466 P.2d 225, on the ground that it constituted an overbroad intrusion into the private financial affairs of persons seeking to hold, or holding, public office. We stated in Carmel (p. 272, 85 Cal.Rptr. p. 10, 466 P.2d p. 234), however, that 'nothing we say here should be deemed to preclude the Legislature in a properly drawn statute from providing for a broad disclosure of assets, income or receipts relevant to the duties and functions of a public officer or employee.' We have concluded that although the statute now before us contains some imprecise and uncertain language, nevertheless taken as a whole the new act meets the basic and substantial objections raised in our Carmel case and, accordingly, that we should uphold the act against plaintiffs' general constitutional attack. Analysis of the problems which may arise respecting the interpretation or application of particular provisions of the act should be deferred for future cases in which those provisions are more directly challenged.

Plaintiffs are the County of Nevada and various of its supervisors, planning commissioners and other public officials. Defendant MacMillen is District Attorney of Nevada County, and is charged with enforcing the statute in question. Plaintiffs' complaints sought a declaratory judgment declaring the act unconstitutional. They alleged that the act is unconstitutionally vague, requiring men 'of common intelligence' to guess at its meaning, at the risk of substantial penalties. They further contended that the act is unconstitutionally overbroad, invading 'the fundamental right of privacy' without serving a reasonable legislative purpose. According to plaintiffs, several county officers 'will resign rather than file statements of assets disclosing their financial affairs, or to divest themselves of all economic interests.'

In December 1973 two trial court judges deemed themselves disqualified from proceeding with this case, apparently on the theory that all superior court judges are so disqualified. On January 18, 1974, this court issued its order stating that superior court judges are not so disqualified and directing the court to proceed to hear and determine the cause. (County of Nevada v. Superior Court, 10 Cal.3d 663, 111 Cal.Rptr. 568, 517 P.2d 832.)

At trial, no factual evidence was presented, and it was stipulated that the constitutionality of the statute on its face was the sole issue to be decided. The trial court, focussing on several isolated provisions of the act, discussed below, held the act unconstitutional and enjoined defendant from enforcing its provisions. Defendant appeals. We have stayed the operation of the act pending our disposition of the appeal.

1. The 1973 Act

We first set forth in summary form the basic provisions of the 1973 act, which adds new sections 3600 through 3760 to the Government Code. It was passed, according to the 'legislative findings' set forth in section 3601, to promote and accomplish several state policies including (1) assuring the independence, impartiality and honesty of public officials, (2) informing citizens regarding those economic interests of officials which might present a conflict of interest, (3) preventing improper personal gain by persons holding public office, (4) assuring that governmental decisions are properly arrived at, and (5) preventing special interests from unduly influencing governmental decisions. The act further specifies that its provisions 'are to be liberally construed to the end that the public interest be fully protected.' (§ 3602.) The act contains Two severability clauses whereby the invalidity of any of its provisions shall not affect other valid provisions. (§§ 3602, 3760.)

The act's substantive provisions fall generally into two separate categories, 'prohibitions' (§§ 3625--3627) and 'disclosure' (§§ 3700--3710). The former category is aimed at prohibiting public officials from possessing economic interests which conflict with their public duties. Thus, section 3625, subdivision (a), provides that 'No official ¹ shall have economic interests ² which are in substantial conflict with the proper exercise of his official duties and powers.' Subdivision (b) provides that 'No public official shall participate in, or in any way attempt to influence, governmental action or decisions relating to any matter within the responsibilities of his agency in which he knows or has reason to believe he has an economic interest.'

An exception to the prohibition against participation of subdivision (b) is made for 'any constitutional officer' ³ or for 'any public official with respect to any matter which could not legally be acted upon or decided by his public agency without his participation,' so long as the official publicly discloses and describes any economic interest which might be materially affected by his action before he acts on the matter, and refrains from attempting to influence any other public officers regarding the matter. (§ 3625, subd. (d).) A second exception to subdivision (b) is made if the action or decision affects the official's economic interest 'to no greater extent than any other . . . member of the public, segment of the public or an industry, profession or occupation.' (Id., subd. (e).)

With respect to the 'disclosure' provisions of the act, applicable only to certain designated officials ⁴ such as constitutional officers, county supervisors, city council members, planning commissioners and other 'chief administrative officers,' such officials must, during the month of April each year, file a statement containing certain specified information. (§ 3700.) Among other things, the act requires disclosure of information regarding (1) any 'business entity in which he (the official) has, or at any time during the year had, a direct or indirect investment ⁵ worth more than one thousand dollars ($1,000), and whether the value of such investment exceeds ten thousand dollars ($10,000)'; (2) any real property in which the official had an interest worth more than $1,000, indicating whether that interest is worth more than $10,000, (3) '(e)ach source of income, loans or gifts, aggregating two hundred fifty dollars ($250) or more in value, received in the preceding 12 months, including the name, address, and general description of the business activity of each source, a statement of the consideration, if any, for which the income was received, and whether the aggregate value of the income, loans and gifts received was worth more than one thousand dollars ($1000),' and (4) any employment position or office held at the time of filing or during the year by the official. (§ 3700, subd. (b).)

Under subdivision (c) of section 3700, no interest need be disclosed 'which could not be affected materially by any action, failure to act or decision taken by the public official acting within the scope of his official duties.' However, under subdivision (d), 'an interest in real property located within the jurisdiction of the official's agency or an investment in a business entity, a source of income or a position of employment, office or management in any business entity located within the jurisdiction . . . shall be regarded as an interest which could be effected materially by the official in the scope of his official duties.'

The disclosure statement required by section 3700 must also be filed by candidates and nominees for the designated offices, before they face election or assume office (§ 3701), and by former officials, who must file within 30 days after ceasing to hold office (§ 3702). Although section 3700 is applicable only to the class of officials designated in the section, similar statements may be required of other public officials, at the option of the agency involved; section 3704 authorizes all public agencies and boards to adopt rules governing financial disclosure. All statements filed under section 3700 become public records available for public inspection. (§ 3710.)

Finally, the act contains extensive 'enforcement' provisions (§§ 3750--3760) which set forth the penalties and other consequences of noncompliance with the act's provisions. The act provides that if a public officer has realized an economic benefit in violation of section 3625 (wrongfully participating in or influencing agency decision) the court may impose a penalty 'of up to three times the value of the benefit.' (§ 3751, subd. (c).) Moreover, if the official failed to disclose an economic interest in violation of section 3700, the court may impose a penalty 'of up to three times the value of the omitted interest.' (§ 3751, subd. (d).) Finally, a violation of the act 'shall be grounds for forfeiture of office . . . and for disqualification from holding public office . . ..' (§ 3753.)

2. The 1974 Amendments

On March 4, 1974, the Legislature amended the foregoing provisions in various respects. (See Stats.1974, ch. 48, pp. 157--161 (S.B. 1340).) These amendments will become effective on January 1, 1975, and, accordingly, do not directly affect the operation of the foregoing provisions during 1...