McClung v. Employment Development Dept.

• Decision Date: 04 November 2004
• Docket Number: No. S121568.,S121568.
• Citation: McClung v. Employment Development Dept., 20 Cal.Rptr.3d 428, 34 Cal.4th 467, 99 P.3d 1015 (Cal. 2004)
• Court: California Supreme Court
• Parties: Lesli Ann McCLUNG, Plaintiff and Appellant, v. EMPLOYMENT DEVELOPMENT DEPARTMENT et al., Defendants and Respondents.

20 Cal.Rptr.3d 428

34 Cal.4th 467

99 P.3d 1015

Lesli Ann McCLUNG, Plaintiff and Appellant, v.EMPLOYMENT DEVELOPMENT DEPARTMENT et al., Defendants and Respondents.

No. S121568.

Supreme Court of California.

November 4, 2004.

Law Offices of Guy D. Loranger, Guy D. Loranger; and Shelley Gregory, San Francisco, for Plaintiff and Appellant.

Bill Lockyer, Attorney General, James M. Schiavenza, Louis R. Mauro, Barton R. Jenks and Diana L. Cuomo, Deputy Attorneys General, for Defendant and Respondent Employment Development Department.

Matheny Sears Linkert & Long, Michael A. Bishop and Roger Yang, Sacramento, for Defendant and RespondentManuel Lopez.

CHIN, J.

"It is, emphatically, the province and duty of the judicial department, to say what the law is.Those who apply the rule to particular cases, must of necessity expound and interpret that rule."(Marbury v. Madison(1803)1 Cranch 137, 5 U.S. 137, 177, 2 L.Ed. 60.)

This basic principle is at issue in this case.In Carrisales v. Department of Corrections(1999)21 Cal.4th 1132, 90 Cal. Rptr.2d 804, 988 P.2d 1083(Carrisales), we interpreted Government Code section 12940(hereafter section 12940), part of the California Fair Employment and Housing Act (FEHA).Later, the Legislature amended that section by adding language to impose personal liability on persons Carrisales had concluded had no personal liability.(§ 12940, subd. (j)(3).)Subdivision (j) also contains a statement that its provisions "are declaratory of existing law...."(§ 12940, subd. (j)(2).)Based on this statement, plaintiff argues that the amendment did not change, but merely clarified, existing law.Accordingly, she argues, the amendment applies to this case to impose personal liability for earlier actions despite our holding in Carrisales that no personal liability attached to those actions.

We disagree.Under fundamental principles of separation of powers, the legislative branch of government enacts laws.Subject to constitutional constraints, it may change the law.But interpreting the law is a judicial function.After the judiciary definitively and finally interprets a statute, as we did in Carrisales, supra,21 Cal.4th 1132, 90 Cal.Rptr.2d 804, 988 P.2d 1083, the Legislature may amend the statute to say something different.But if it does so, it changes the law; it does not merely state what the law always was.Any statement to the contrary is beyond the Legislature's power.We also conclude this change in the law does not apply retroactively to impose liability for actions not subject to liability when performed.

I.FACTS AND PROCEDURAL BACKGROUND

In January 1998, plaintiffLesli Ann McClung filed a complaint against the Employment Development Department and Manuel Lopez, alleging claims of hostile work environment and failure to remedy a hostile work environment under the FEHA, as well as another cause of action not relevant here.The superior court granted summary judgment for defendants, and plaintiff appealed.

The Court of Appeal affirmed the judgment in favor of the Employment Development Department, but reversed it as to Lopez.In so doing, it held that Lopez was plaintiff's coworker, not supervisor.It also recognized that we had held in Carrisales, supra,21 Cal.4th at page 1140, 90 Cal.Rptr.2d 804, 988 P.2d 1083, that the FEHA does not "impose personal liability for harassment on nonsupervisory coworkers."Nevertheless, it found Lopez personally liable for harassment under the FEHA.It applied an amendment to the FEHA that imposes personal liability on coworkers (§ 12940, subd. (j)(3)), even though the amendment postdated the actions underlying this lawsuit.It found that the preexisting statement in section 12940, subdivision (j)(2), that subdivision (j)'s provisions "are declaratory of existing law,""supports the conclusion that [the amendment] merely clarifies the meaning of the prior statute."Ultimately, it concluded that whether "the amendment merely states the true meaning of the statute or reflects the Legislature's purpose to achieve a retrospective change, the result is the same: we must give effect to the legislative intent that the personal liability amendment apply to all existing cases, including this one.""For Lopez," said the Court of Appeal, "the Supreme Court's interpretation of individual liability under FEHA can be said to have come and gone."

We granted Lopez's petition for review to decide whether section 12940, subdivision (j)(3), applies to this case.

II.DISCUSSION

A.Background

The FEHA"declares certain kinds of discrimination and harassment in the workplace to be `unlawful employment practice[s].'(§ 12940.)"(Carrisales, supra,21 Cal.4th at p. 1134,90 Cal.Rptr.2d 804,988 P.2d 1083.)In Carrisales,we interpreted the FEHA as imposing "on the employer the duty to take all reasonable steps to prevent this harassment from occurring in the first place and to take immediate and appropriate action when it is or should be aware of the conduct," but as not imposing "personal liability for harassment on nonsupervisory coworkers."(Carrisales, supra, at p. 1140, 90 Cal.Rptr.2d 804,988 P.2d 1083, citing§ 12940, former subd. (h)(1).)Later, effective January 1, 2001, the Legislature amended the subdivision of section 12940 that we interpreted in Carrisales(now subdivision (j)).(Stats. 2000, ch. 1049, §§ 7.5, 11.)As amended, section 12940, subdivision (j)(3), provides in relevant part: "An employee of an entity subject to this subdivision is personally liable for any harassment prohibited by this section that is perpetrated by the employee...."It seems clear, and no one disputes, that this provision imposes on nonsupervisory coworkers the personal liability that Carrisales said the FEHA had not imposed.Subdivision (j) also states that its provisions "are declaratory of existing law...."(§ 12940, subd. (j)(2).)

We must decide whether the amendment to section 12940 applies to actions that occurred before its enactment.If the amendment merely clarified existing law, no question of retroactivity is presented."[A]statute that merely clarifies, rather than changes, existing law does not operate retrospectively even if applied to transactions predating its enactment""because the true meaning of the statute remains the same."(Western Security Bank v. Superior Court(1997)15 Cal.4th 232, 243, 62 Cal.Rptr.2d 243, 933 P.2d 507(Western Security Bank).)In that event, personal liability would have existed at the time of the actions, and the amendment would not have changed anything.But if the amendment changed the law and imposed personal liability for earlier actions, the question of retroactivity arises."A statute has retrospective effect when it substantially changes the legal consequences of past events."(Ibid.)In this case, applying the amendment to impose liability that did not otherwise exist would be a retroactive application because it would "attach[] new legal consequences to events completed before its enactment."(Landgraf v. USI Film Products(1994)511 U.S. 244, 270, 114 S.Ct. 1483, 128 L.Ed.2d 229(Landgraf).)Specifically, it would "increase a party's liability for past conduct...."(Id. at p. 280, 114 S.Ct. 1483;accord, Myers v. Philip Morris Companies, Inc.(2002)28 Cal.4th 828, 839, 123 Cal.Rptr.2d 40, 50 P.3d 751(Myers).)

Accordingly, two separate questions are presented here: (1) Did the amendment extending liability in subdivision (j)(3) change or merely clarify the law?(2) If the amendment did change the law, does the change apply retroactively?We consider the former question first.Because we conclude the amendment did, indeed, change the law, we also consider the latter question.

B.Whether the Amendment Changed the Law

"The powers of state government are legislative, executive, and judicial.Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution."(Cal. Const., art. III, § 3.)"The judicial power of this State is vested in the Supreme Court, courts of appeal, and superior courts, all of which are courts of record."(Cal. Const., art. VI, § 1.)Thus, "The judicial power is conferred upon the courts by the Constitution and, in the absence of a constitutional provision, cannot be exercised by any other body."(Bodinson Mfg. Co. v. California E. Com.(1941)17 Cal.2d 321, 326, 109 P.2d 935.)

The legislative power rests with the Legislature.(Cal. Const., art. IV, § 1.)Subject to constitutional constraints, the Legislature may enact legislation.(Methodist Hosp. of Sacramento v. Saylor(1971)5 Cal.3d 685, 691, 97 Cal.Rptr. 1, 488 P.2d 161.)But the judicial branch interprets that legislation."Ultimately, the interpretation of a statute is an exercise of the judicial power the Constitution assigns to the courts."(Western Security Bank, supra,15 Cal.4th at p. 244,62 Cal. Rptr.2d 243,933 P.2d 507;see alsoPeople v. Cruz(1996)13 Cal.4th 764, 781, 55 Cal. Rptr.2d 117, 919 P.2d 731.)Accordingly, "it is the duty of this court, when ... a question of law is properly presented, to state the true meaning of the statute finally and conclusively...."(Bodinson Mfg. Co. v. California E. Com., supra,17 Cal.2d at p. 326, 109 P.2d 935.)

In Carrisales, supra,21 Cal.4th 1132, 90 Cal.Rptr.2d 804, 988 P.2d 1083, we interpreted the FEHA finally and conclusively as not imposing personal liability on a nonsupervisory coworker.This interpretation was binding on lower state courts, including the Court of Appeal.(Auto Equity Sales, Inc. v. Superior Court(1962)57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)"The decisions of this court are binding upon and must be followed by all the statecourts of California....Courts exercising inferior jurisdiction must accept the law declared by courts of superior jurisdiction.It is not their function to attempt to overrule decisions of a higher court."(Ibid.)

It is true that if the courts have not...