Jarvis v. Cory

• Decision Date: 18 December 1980
• Docket Number: S.F. 24047
• Citation: 28 Cal.3d 562,170 Cal.Rptr. 11,620 P.2d 598
• Court: California Supreme Court
• Parties: , 620 P.2d 598 Howard JARVIS, Petitioner, v. Kenneth CORY, as State Controller et al., Respondents. Armin BRODTY et al., Petitioners, v. Kenneth CORY, as State Controller et al., Respondents.

Page 11

170 Cal.Rptr. 11

28 Cal.3d 562, 620 P.2d 598

Howard JARVIS, Petitioner, v. Kenneth CORY, as State Controller et al., Respondents.

Armin BRODTY et al., Petitioners, v. Kenneth CORY, as State Controller et al., Respondents.

S.F. 24047.

Supreme Court of California, In Bank.

Dec. 18, 1980.

Rehearing Denied Feb. 17, 1981.

Kaplanis & Grimm, Trevor A. Grimm, Schurmer, Drane, Bullis & McCarthy, Walter H. Drane, Los Angeles, and Lynn S. Carman, for petitioners.

George Deukmejian, Atty. Gen., Richard D. Martland, Asst. Atty. Gen., Talmadge R. Jones, George J. Roth, Susan J. Orton, Deputy Attys. Gen., for respondents.

Loren E. McMaster and Bernard L. Allamano, Sacramento, Van Bourg, Allen, Weinberg & Roger, David Rosenfeld, Stewart Weinberg, San Francisco, Ruth Benson, Los Angeles, and David E. Feller, Univ. of Cal., Berkeley, as amici curiae on behalf of respondent California State Employees Association.

MOSK, Justice.

In these consolidated cases petitioners Jarvis and Brodty seek writs of mandate declaring a salary appropriation bill unconstitutional and ordering respondent State Controller (Cory) to refrain from expending any funds pursuant to the bill. We must decide whether Senate Bill No. 91, 1979 Regular Session (SB 91), which awards a lump sum payment to certain state employees based on work already performed, violates provisions of the California Constitution that preclude the Legislature from enacting retroactive "extra compensation" for state employees (art. IV, § 17) and from sending an appropriation that augments a future budget act to the Governor before that act takes effect (art. IV, § 12, subd. (c)).

I.

SB 91 was enacted on July 2, 1979, under circumstances described below. Immediately thereafter, Armin Brodty filed a taxpayers' action against Cory and the California State Employees Association (CSEA), ¹ praying for mandatory and injunctive relief that would preclude Cory from implementing SB 91. When the trial court dismissed that suit, Brodty sought an original writ of mandate in this court. The following day, Jarvis filed a separate petition for mandate here, claiming the trial court's dismissal of the identical Brodty action established the inadequacy of relief below. We transferred both matters to the Court of Appeal, where they were consolidated. After decision in that court, we granted a hearing. ²

Jarvis mounts a preliminary attack on SB 91 by contending that the timing of its enactment violates the constitutional prohibition against sending to the Governor a bill appropriating funds for expenditure during a fiscal year for which no budget bill has yet been enacted. (Cal.Const., art. IV, § 12, subd. (c).) In denying that the bill offends this provision, Cory relies on the bill's history and language and on the apparent purpose underlying the constitutional provision. His arguments convince us that SB 91 is not invalid under section 12.

Jarvis also contends SB 91 violates the extra compensation clause of the Constitution (art. IV, § 17), because it provides additional compensation for services already rendered at a time when employees had no right to a salary increase. In response, Cory asserts that (1) under the terms of SB 91, the lump sum award is prospective rather than retroactive and hence constitutional; (2) equal protection requires that we uphold SB 91 because we allowed retroactive raises for noncontract local employees on equal protection grounds in a 1979 decision; and (3) prior California holdings have carefully construed the extra compensation prohibition to exclude from its application salary adjustments comparable to those in the instant case.

Although we find Cory's first contention unpersuasive and do not reach the second, we are convinced the third is a correct application of the law. On examining the unique confluence of events that gave rise to SB 91, we conclude that the payments it authorizes are analogous to retroactive adjustments allowed public employees in prior cases where they have shown their salary levels were left uncertain during the period they rendered service. As will appear, important policy considerations reinforce our conclusion.

II.

We first deal with Jarvis' claim that SB 91 is invalid as a prebudget act appropriation.

Article IV, section 12, subdivision (c), provides in pertinent part: "Until the budget bill has been enacted, the Legislature shall not send to the Governor for consideration any bill appropriating funds for expenditure during the fiscal year for which the budget bill is to be enacted, except emergency bills recommended by the Governor or appropriations for the salaries and expenses of the Legislature."

The relevant provisions of SB 91 are sections 1, 1.5, and 2.8. Sections 1 and 1.5, virtually identical on their face, are alternative provisions: under the terms of section 2.8, section 1 would take effect only if the bill was enacted before the new fiscal year began on July 1 (§ 2.8, subd. (a)); section 1.5 would take effect only if the bill was enacted thereafter (§ 2.8, subd. (b)). Sections 1 and 1.5 both appropriate $207,660,500 from the state's General Fund and certain special funds for the contested salary increases. Under both sections, the salary increases are made as a lump sum payment to "current employees on or after May 31, 1979, and academic employees employed at the end of their current academic year ... equivalent to (a 7 percent salary increase from October 1, 1978, through June 30, 1979)." (§§ 1 & 1.5, subd. (a)(2).) The sections differ only in that under section 1 the appropriation is made "to augment" various items of the 1978-1979 Budget Act while under section 1.5 the same appropriation is made "for salary and benefit increases" provided in those items. In other words, section 1.5 does not directly augment the 1978-1979 Budget Act, but merely incorporates by reference the relevant items of that act, apparently because the Legislature feared it could not directly augment a budget act for a fiscal year already ended.

After months of consideration and revision, the Legislature passed the bill and sent it to the Governor on June 19, 1979. The Governor, whose failure to act upon a bill within 12 days normally results in its automaticenactment (Cal.Const., art. IV, § 10, subd. (a)), retained it for the full 12 days, then vetoed the bill on July 1. The Legislature promptly overrode the veto on July 2, and the bill became law with section 1.5, appropriating money in the new fiscal year, operative. Although the Constitution directs the Legislature to pass the budget bill by June 15 (art. IV, § 12, subd. (c)), the 1979-1980 Budget Act was not adopted until July 6. Therefore, contends Jarvis, submission of SB 91 to the Governor on June 19 rendered the statute invalid.

The contention ignores the apparent purpose of section 12, subdivision (c), revealed by the phrase "the Legislature shall not send to the Governor." The provision is designed to enable the Governor to consider the budget bill without a clutter of appropriation measures for the upcoming fiscal year constantly crossing his desk. In sending SB 91 to the Governor on June 19, the Legislature did not violate that policy. When the Governor received it, SB 91 was a bill that, if enacted before July 1, would appropriate funds in a fiscal year for which a budget bill had long since been enacted. The mere possibility that it might appropriate funds in the forthcoming fiscal year did not bring it within the Constitution's explicit terms. Furthermore, the Governor had ample time before the next fiscal year began to consider and act on SB 91 as a bill augmenting the then-existing budget. It was not the Legislature's action, but the 12 days of contemplation by the Governor, that carried the bill into the 1979-1980 fiscal year and thus rendered it a prebudget act appropriation. Because the command of section 12, subdivision (c), is directed only at the Legislature, the Governor's delayed veto did not render SB 91 invalid.

Nor did the Legislature's subsequent override invalidate the statute. Upon override, the bill was sent not to the Governor for prebudget action but directly to the Secretary of State for filing. (See Cal. Const., art. V, § 18.) Again, the policy of article 12, subdivision (c), was not offended. The Constitution focuses on the time at which the bill is "sent" to the Governor: if it is in compliance when he receives it, no inquiry about subsequent events is necessary or appropriate.

Accordingly, we hold the procedure by which SB 91 was enacted did not violate article IV, section 12, subdivision (c).

III.

We now address the claim that SB 91 constitutes prohibited extra compensation. Article IV, section 17, of the California Constitution declares in pertinent part: "The Legislature has no power to grant ... extra compensation or extra allowance to a public officer, public employee, or contractor after service has been rendered or a contract has been entered into and performed in whole or in part ...."

As previously noted, SB 91 provides salary adjustments for certain classes of state employees based on work performed during the fiscal year prior to the enactment of the statute. According to the bill (§§ 1 & 1.5, subd. (b)), the adjustments "are provided not as a retroactive salary increase, but for continued services rendered on or after the effective date of this act to the extent that any such services may be rendered. Recent events make these adjustments necessary to ensure the continued recruitment and retention of qualified and competent state employees. (P) The lump sum ... shall also be paid to those employees who retired between October 1, 1978, and May 31, 1979."

Cory relies on the above language in contending SB 91 does not violate the extra compensation clause because it establishes a prospective rather than retroactive salary increase. SB 91, according to Cory, confers benefits only on employees "currently employed as...