Haw.I Gov't EMPLOYEES Ass'n v. LINGLE

• Decision Date: 08 September 2010
• Docket Number: No. 29972.,29972.
• Citation: 239 P.3d 1,124 Hawai'i 197
• Parties: HAWAII GOVERNMENT EMPLOYEES ASSOCIATION, AFSCME LOCAL 152, AFL-CIO, Plaintiff-Appellee, and Hawaii State Teachers Association and United Public Workers, AFSCME, Local 646, ALF-CIO, Intervenors-Appellees, v. Linda LINGLE, as Governor of the State of Hawai‘i; and Does 1-10, Defendant-Appellant.
• Court: Hawaii Supreme Court

124 Hawai'i 197
239 P.3d 1

HAWAII GOVERNMENT EMPLOYEES ASSOCIATION, AFSCME LOCAL 152, AFL-CIO, Plaintiff-Appellee,
and
Hawaii State Teachers Association and United Public Workers, AFSCME, Local 646, ALF-CIO, Intervenors-Appellees,
v.
Linda LINGLE, as Governor of the State of Hawai‘i; and Does 1-10, Defendant-Appellant.

No. 29972.

Supreme Court of Hawai‘i.

Sept. 8, 2010.

239 P.3d 2

COPYRIGHT MATERIAL OMITTED.

239 P.3d 3

Mark J. Bennett, Attorney General, (Lisa M. Ginoza, First Deputy Attorney General and Deirdre Marie-Iha, Deputy Solicitor General with him on the briefs) for Defendant-Appellant Linda Lingle, as Governor of the State of Hawai‘i.

Charles A. Price (James E.T. Koshiba with him on the brief) of Koshiba Agena & Kubota, Honolulu, for Plaintiff-Appellee Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO.

Herbert R. Takahashi (Rebecca L. Covert, Danny J. Vasconcellos and Rebecca L. Covert with him on the brief) of Takahashi Vasconcellos & Covert, Honolulu, and Scott A. Kronland of Altshuler Berzon LLP, pro hac vice, for Intervenor-Appellee Hawaii State Teachers Association and United Public Workers, AFSCME, Local 646, AFL-CIO.

NAKAYAMA, Acting C.J., DUFFY and RECKTENWALD, JJ., Circuit Judge AHN in place of MOON, C.J., Recused, and ACOBA, J., Dissenting.

Opinion of the Court by NAKAYAMA, J.

124 Hawai'i 199

Defendant-Appellant, Linda Lingle (“Lingle”), as Governor of the State of Hawai‘i, appeals from the Circuit Court of the First Circuit's ¹ (“circuit court's”) July 28, 2009 final judgment and findings of fact, conclusions of law, and order in favor of Plaintiff-Appellee, Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO (“HGEA”). On appeal, Lingle presents the following points of error: (1) “the circuit court erred when it acted without jurisdiction and ruled on whether the furlough plan complied with Hawai‘i Revised Statutes (HRS) § 89-9(d) [ (Supp.2008) ² ] and the unilateral change doctrine”; (2) “[t]he circuit court erred when it concluded that [Lingle's] furlough plan was not a valid exercise of her management rights under HRS § 89-9(d) and violated the unilateral change doctrine”; (3) “[t]he circuit court erred when it incorrectly ruled, as a matter of law, that [Lingle's] furlough plan violated the constitutional right to bargain collectively in the public sector under [a]rticle XIII § 2 of the Hawaii constitution”; ³ and (4) “[t]he circuit court erred in applying the test for injunctive relief

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because “HGEA demonstrated no irreparable harm, and the public interest did not support granting the injunction, and the circuit court misread the ... law.” Based upon the following analysis, we vacate the circuit court's July 28, 2009 final judgment and findings of fact, conclusions of law and order, and remand this case for further proceedings consistent with this opinion. More specifically, we hold that the Hawai‘i Labor Relations Board (“HLRB”) had “exclusive original jurisdiction” over the statutory issues raised by HGEA, and that the circuit court should have deferred ruling on the constitutional issues until after the HLRB had the opportunity to resolve the statutory questions.

I. BACKGROUND

A. Executive Order 09-02

On June 24, 2009, Lingle issued executive order 09-02. Therein it was observed that “the widespread impact of the global financial crisis and constantly decreasing revenue projections by the [state] Council on Revenues ... forced the State of Hawaii to make drastic and unprecedented revenue and expenditure adjustments to close a budget shortfall of approximately two billion dollars ($2,000,000,000) through the fiscal biennium 2009-2011[.]” (Brackets and ellipsis added.) It observed further that, “based on the May 28, 2009 projections by the [state] Council on Revenue, the State of Hawaii is ... facing an additional deficit of seven hundred thirty million dollars ($730,000,000) through the fiscal biennium 2009-2011, resulting in an immediate fiscal emergency of unparalleled magnitude[.]”

In light of the current revenue estimates, executive order 09-02 ordered the furlough ⁴ of certain state executive branch employees for a total of seventy-two work days over the fiscal biennium 2009-2011, ⁵ which was to become effective on July 1, 2009, and subject to certain terms and conditions. Among these terms and conditions was the requirement that the affected state executive branch employees' pay would be “automatically adjusted” by reducing the affected employee's pay between 13.8% and 15.8% each pay period to account for the furlough days.

Although executive order 09-02 was issued on June 24, 2009, on June 1, 2009, Lingle publicly announced her plan to, among other things, furlough certain state executive branch employees for “3 days/24 hours each month, from July 1, 2009 to June 30, 2011, thereby unilaterally reducing employees' hours and cutting employees' wages approximately 13.8%.”

B. Circuit Court Proceedings

After Lingle's June 1, 2009 announcement, on June 16, 2009, HGEA filed a complaint in the circuit court that sought, among other things, a declaratory judgment that Lingle “cannot unilaterally impose the furloughs,” and a preliminary and permanent injunction enjoining Lingle from “unilaterally imposing” the same. HGEA based its request for relief on article XIII, section 2 of the Hawai‘i constitution and HRS Chapter 89.

In a first amended complaint filed on June 22, 2009, HGEA averred that Lingle “intends to unilaterally implement new procedures regarding layoffs after June 20, 2009 and impose mass state employee[ ] layoffs” “if her furlough plan is blocked by the courts.” As such, HGEA also sought a declaratory judgment that Lingle cannot “unilaterally impose new layoff procedures,” and a preliminary and permanent injunction enjoining Lingle from “unilaterally imposing” the same.

On June 23, 2009, HGEA filed a motion for preliminary injunction. Briefly summarized, in its memorandum in support of its motion, HGEA asserted that collective bargaining is a constitutionally protected right and statutorily mandated. HGEA also asserted that furloughs are a “mandatory and core subject of collective bargaining” pursuant to HRS Chapter 89 and common law, and the common

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law “unilateral change” doctrine prevents Lingle from unilaterally imposing furloughs during the pendency of an arbitration process between it and the public employers. ⁶

On June 29, 2009, Lingle filed her opposition to HGEA's motion for preliminary injunction. Among the arguments made, Lingle asserted that HGEA's assertions are “predominately prohibited practices complaints that fall under HLRB's ‘exclusive primary jurisdiction.’ ” Lingle also asserted that (1) the “management rights” in HRS § 89-9(d) gives her authority to furlough “unionized workers” and these “rights” are not subject to collective bargaining, (2) the furlough order is consistent with article XIII, section 2 of the Hawai‘i constitution, (3) the furlough order does not violate the unilateral change doctrine, (4) HGEA's complaints about layoff procedures are premature and within HLRB's jurisdiction even when ripe, (5) HGEA has not shown that they will suffer irreparable damage if the preliminary injunction is denied, and (6) the public interest requires denying the injunction.

On July 28, 2009, the circuit court filed its findings of fact, conclusions of law, and order that, among other things, granted in part HGEA's motion for preliminary injunction. ⁷ Therein, the circuit court made the following pertinent conclusions: (1) pursuant to United Pub. Workers, AFSCME, Local 646, AFL-CIO v. Yogi, 101 Hawai‘i 46, 62 P.3d 189 (2002) and Malahoff v. Saito, 111 Hawai‘i 168, 140 P.3d 401 (2006), Lingle's unilateral decision to furlough certain unionized state executive branch employees “infringed on core subjects of collective bargaining [ (namely, wages) ], in violation of article XIII, section 2 of the Hawaii constitution[,]”; (2) pursuant to NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), “certain terms and conditions of an expired agreement continue in effect by operation of law” and, inasmuch as the furloughs “change wages,” the furloughs “cannot be imposed by unilateral action[,]”; (3) essentially, inasmuch as “the courts retain jurisdiction to consider constitutional claims[,]” Lingle's assertion that the HLRB has exclusive jurisdiction over this matter is unpersuasive; (4) United Pub. Workers, AFSCME, Local 646, AFL-CIO v. Hanneman, 106 Hawai‘i 359, 105 P.3d 236 (2005) is inapposite; (5) Lingle's reliance on the “managerial rights” provisions in HRS § 89-9(d) “to justify unilateral imposition of the furlough program cannot be accepted because it would allow lawmakers absolute discretion to define the scope of collective bargaining, thereby defeating the intent of [a]rticle XIII, [s]ection 2[,]”; and (6) the issues of layoff procedures and criteria are not ripe for consideration at this time.

A final judgment was filed on June 28, 2009. On July 31, 2009, Lingle timely filed a notice of appeal.

On September 1, 2009, Lingle filed an application to transfer her appeal from the Intermediate Court of Appeals to this court. On September 22, 2009, this court granted Lingle's application for transfer.

II. STANDARDS OF REVIEW

A. Subject Matter Jurisdiction

“Whether a court possesses subject matter jurisdiction is a question of law reviewable de novo.” Hawaii Mgmt. Alliance Ass'n v. Ins. Comm'r, 106 Hawai‘i 21, 27, 100 P.3d 952, 957 (2004) (citation and internal quotation marks omitted).

B. Statutory Interpretation

“Questions of statutory interpretation are questions of law reviewable de

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[239 P.3d 6]

novo.” Gump v. Wal-Mart Stores, Inc., 93 Hawai‘i 417, 420, 5 P.3d 407, 410 (2000). In our review of questions of statutory interpretation, this court follows certain well-established principles, as follows:

First, the...