Diquisto v. County of Santa Clara

Citation181 Cal.App.4th 236,104 Cal.Rptr.3d 93
Decision Date22 January 2010
Docket NumberNo. H032345.,H032345.
PartiesJOHN DIQUISTO et al., Plaintiffs and Appellants, v. COUNTY OF SANTA CLARA et al., Defendants and Respondents.
CourtCalifornia Court of Appeals

Wylie, McBride, Platten & Renner, John McBride, Christopher E. Platten, Mark S. Renner; Clisham & Sortor, David P. Clisham; Law Offices of Donald T. Ramsey; Donald T. Ramsey for Plaintiffs and Appellants.

Ann Miller Ravel, County Counsel, Miguel Marquez, Acting County Counsel, Winifred Botha, Assistant County Counsel, Gregory J. Sebastinelli, Deputy County Counsel; Crowell & Moring, Ethan P. Schulman and Michael Y. Kao for Defendants and Respondents.

OPINION

McADAMS, J.

This litigation arose at the crossroads of public labor bargaining and the electoral initiative process. In early 2004, three unions sponsored a local ballot initiative to mandate binding arbitration as a means of resolving labor disputes with their employer, Santa Clara County. The county opposed the initiative. During the same time period, the county engaged in labor negotiations with the unions, which included discussions aimed at their agreement not to support the initiative.

As taxpayers, plaintiffs sued the county, its board of supervisors, and two county officials, asserting that the county improperly spent public funds for partisan electoral purposes by bargaining for the unions' nonsupport of the initiative measure. Plaintiffs later added claims based on a supervisor's e-mail concerning the initiative. After extensive pretrial proceedings, the matter ended in a bench trial, with the court finding for defendants.

On appeal, plaintiffs renew their arguments that the county impermissibly used public funds for campaigning, both at the bargaining table and through the e-mail. On behalf of itself and the other defendants, the county defends the judgment against both arguments.

As we explain, the trial court's determinations are supported by the evidence and the law. We therefore affirm the judgment.

INTRODUCTION: LEGAL BACKGROUND

To provide context for our discussion of the facts and the parties' contentions, we begin by briefly summarizing the legal principles at play here.

Limits on the Expenditure of Public Funds

As the California Supreme Court recently reaffirmed, "in the absence of clear and unmistakable language specifically authorizing a public entity to expend public funds for campaign activities or materials, the entity lacks authority to make such expenditures." (Vargas v. City of Salinas (2009) 46 Cal.4th 1, 24 [92 Cal.Rptr.3d 286, 205 P.3d 207] (Vargas).) This limitation on the expenditure of public funds for campaigning has been recognized in a long line of California Supreme Court decisions, including the leading case of Stanson v. Mott (1976) 17 Cal.3d 206, 217 [130 Cal.Rptr. 697, 551 P.2d 1] (Stanson).

The Relevant Public Employment Statute

Various statutes govern public employment. (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1084-1086 [29 Cal.Rptr.3d 234, 112 P.3d 623] (Coachella Valley).) At issue here is the Meyers-Milias-Brown Act (MMBA), codified at Government Code sections 3500-3511.1 The MMBA "governs collective bargaining and employer-employee relations for most California local public entities, including cities, counties, and special districts." (Coachella Valley, at p. 1077.) It "requires public agencies to meet and confer in good faith with representatives of recognized employee organizations regarding wages, hours, and other terms and conditions of employment." (County of Sonoma v. Superior Court (2009) 173 Cal.App.4th 322, 329-330 , citing § 3505.) "If these meetings produce an agreement, the representatives of the parties must jointly prepare a written memorandum of understanding (MOU)." (County of Sonoma, at p. 330, citing § 3505.1.) The MOU (memorandum of understanding) must then be approved by the agency's governing body. (County of Sonoma, at p. 330.)

Binding Interest Arbitration

(1) "Interest arbitration involves an agreement between an employer and a union to submit disagreements about the proposed content of a new labor contract to an arbitrator or arbitration panel." (City of Fresno v. People ex rel. Fresno Firefighters (1999) 71 Cal.App.4th 82, 96 (Fresno); see also, e.g., County of Sonoma v. Superior Court, supra, 173 Cal.App.4th at pp. 341-342.)

FACTUAL BACKGROUND

The plaintiffs and appellants are John DiQuisto, Mildred Evans, and Rosemary Knox (collectively, plaintiffs). They are taxpayers and residents of the County of Santa Clara. The defendants and respondents are the County of Santa Clara, its board of supervisors, and two of its officials, chief administrative officer Peter Kutras, Jr., and chief labor negotiator Luke Leung (collectively, the County).

The Ballot Initiative: Measure C

In early 2004, three Santa Clara County public sector labor unions agreed to sponsor a local initiative measure on the November 2004 ballot. The three sponsoring unions were the Registered Nurses Professional Association (RNPA), the Santa Clara County Correctional Peace Officers' Association (CPOA), and the Santa Clara Government Attorneys Association (GAA).

The initiative's purpose was to amend the county's charter by adding a provision for binding interest arbitration as a means of resolving labor disputes between the three sponsoring unions and the County.

On April 2, 2004, plaintiff Rosemary Knox, in her capacity as president of RNPA, filed a notice of intent to circulate a petition to qualify the measure for the ballot. The measure's proponents began gathering signatures three weeks later, on April 23, 2004.

On June 4, 2004, representatives of the three sponsoring unions met with county Supervisor Donald Gage, and with Kutras, Leung, and other county representatives, to discuss the initiative. The unions "discussed binding interest arbitration and ... shared with [the County] that [the measure] would go forward" while "reaching out to see if there was some language that would be acceptable for both sides." No agreement was reached.

On June 23, 2004, the initiative qualified for the November ballot, identified as Measure C. On August 3, 2004, the county's board of supervisors adopted a resolution to submit Measure C to the voters.

The county opposed Measure C. Acting through its board of supervisors, the county placed two countermeasures on the ballot, identified as Measures A and B.

In October 2004, county Supervisor Blanca Alvarado directed the dissemination of an e-mail to approximately 1,500 individuals, encouraging the recipients to educate themselves about the three initiative measures and attaching a copy of a newspaper editorial urging a "no" vote on Measure C and a "yes" vote on Measures A and B.

In November 2004, Measure C was defeated at the polls, as were Measures A and B.

Contract Negotiations

In 2003 and 2004, the County was engaged in contract negotiations with a number of its employee unions. The aim of the negotiations was to reach agreement with each union for a labor contract.

Negotiations with the Deputy Sheriffs' Association

One of the unions negotiating with the County was the Deputy Sheriffs' Association of Santa Clara County (DSA). Those negotiations began in 2003; the then current contract was set to expire in 2004.

One of the "main goals" for the DSA in its negotiations was to secure the County's agreement to "benchmarking" with the San Jose Police Department. With benchmarking, DSA members "would just basically be piggybacked with the San Jose Police Department, so whatever raise they would get [DSA] would subsequently get when [its] contract came due." Although the County seemed resistant to the idea of benchmarking at first, its position softened once the possibility of a longer contract was broached.

On April 1, 2004, the DSA and the County reached a tentative agreement, which included both pay raises and a benchmarking provision. After tentative agreement on those economic issues, the DSA offered the County a "side letter" stating that the DSA would not support the binding interest arbitration initiative. The side letter was "totally" the union negotiator's idea, who "freely" offered it to the County. The union negotiator was aware that the County was "hostile" to the arbitration initiative. The county negotiator was "a bit startled" at the offer but "essentially said, yeah, well, sure."

Both the DSA general membership and the County later ratified the agreement, including the side letter.

Negotiations with the Correctional Peace Officers' Association

In the spring of 2004, the County was also negotiating with the CPOA. The CPOA's contract had expired years before, and the negotiations for a new contract had been underway for some time.

On March 29, 2004, a meeting took place that included county executives Kutras and Leung and CPOA officers Everett Fitzgerald and William Calabrese. As union president, "Fitzgerald wanted the County to enhance its economic offer." At that point, the CPOA was "demanding from the County a 30 percent wage increase over a period of a little over three years," while the County had offered a raise of 18 percent over five and a half years. Fitzgerald "was having difficulty with his rank and file" and he wanted the County "to put more money on the table." Fitzgerald "raised discussions about the binding interest arbitration measure, being asked whether CPOA was going to be in it or not." Fitzgerald indicated that "in order for [CPOA] to stay out of it [he had] to see more money." But according to Kutras, the County was not "going to put more money on the table." The following day, March 30, 2004, the CPOA joined the coalition supporting the arbitration initiative.

The County offered package proposals to the CPOA on April 7th and again on April 12th. Both proposals offered raises much lower than the 30 percent...

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