Olson v. Cory

• Decision Date: 25 June 1982
• Citation: 134 Cal.App.3d 85,184 Cal.Rptr. 325
• Parties: Lester E. OLSON, Edwin F. Beach, Charles Bierschbach, Gerald Brown, Hugh A. Evans, et al., Petitioners, Plaintiffs and Respondents, v. Kenneth CORY, as Controller of the State of California, et al., Respondents, Defendants and Appellants. Civ. 63644.
• Court: California Court of Appeals Court of Appeals

Page 325

184 Cal.Rptr. 325

134 Cal.App.3d 85

Lester E. OLSON, Edwin F. Beach, Charles Bierschbach, Gerald Brown, Hugh A. Evans, et al., Petitioners, Plaintiffs and Respondents, v. Kenneth CORY, as Controller of the State of California, et al., Respondents, Defendants and Appellants.

Civ. 63644.

Court of Appeal, Second District, Division 5, California.

June 25, 1982.

As Modified July 22, 1982.

Hearing Denied Sept. 8, 1982.

Stroock & Stroock & Lavan, William H. Levit, Henry J. Silberberg, Margaret A. Nagle, Los Angeles, for petitioners, plaintiffs and respondents.

George Deukmejian, Atty. Gen., Richard D. Martland, Asst. Atty. Gen., Henry G. Ullerich, Deputy Atty. Gen., for respondents, defendants and appellants.

LAVINE, Associate Justice. ^*

This is an appeal from a judgment granting plaintiffs' motion for judgment on the pleadings and/or summary judgment and declaring that article III, section 4 of the California Constitution, as amended and adopted at the November 4, 1980, General Election, cannot constitutionally be applied to adjust the salary of active judges during their term of office, or adjust the retirement benefits of retired judges calculated on the basis of the salary of active judges.

THE FACTS

The undisputed facts are as follows: In 1980 the California Supreme Court held that statutory amendments to Government Code section 68203 could not be applied prospectively to adjust salaries of judges during their term of office. (Olson v. Cory (1980) 27 Cal.3d 532, 178 Cal.Rptr. 568, 636 P.2d 532, (hereinafter "Olson v. Cory I ").)

On November 4, 1980, at a general election the people of the State of California amended article III, section 4 of the State Constitution to provide as follows:

"(a) Except as provided in subdivision (b), salaries of elected state officers may not be reduced during their term of office. Laws that set these salaries are appropriations.

"(b) Beginning on January 1, 1981, the base salary of a judge of a court of record shall equal the annual salary payable as of July 1, 1980, for that office had the judge been elected in 1978. The Legislature may prescribe increases in those salaries during a term of office, and it may terminate prospective increases in those salaries at any time during a term of office, but it shall not reduce the salary of a judge during a term of office below the highest level paid during that term of office. Laws setting the salaries of judges shall not constitute an obligation of contract pursuant to Section 9 of Article 1 or any other provision of law."

Twelve active and retired judges then filed a class action in 1980 for mandamus, injunctive and declaratory relief, alleging that the 1980 amendment to the State Constitution could not alter the pay structure in effect immediately prior to the election until the end of the "protected terms" for those judges falling within "protected terms." The grounds for this contention included the contract clause and due process clause of the state and federal constitutions and principles of res judicata and collateral estoppel. All unnamed class members were dismissed on motion of plaintiffs, and the case was no longer a class action.

The trial court granted plaintiffs' motion for summary judgment, denied defendants' motion for judgment on the pleadings and entered a declaratory judgment from which an appeal was taken.

California judges first assume office through election or appointment. If appointed, the appointee appears on the ballot at the first general election at which the appointee has a right to become a candidate. Once elected, the term of an appellate court judge is 12 years and superior court judge is 6 years. (Cal.Const., art. VI, § 16.) Since 1964, the amount of judicial salaries has been prescribed by Government Code sections 68200-68202, subject to increases as provided for in section 68203.

Section 68203, as amended in 1969, provided:

"In addition to the increase provided under this section on September 1, 1968, on the effective date of the 1969 amendments to this section and on September 1 of each year thereafter the salary of each justice and judge named in Sections 68200 to 68202, inclusive, shall be increased by that amount which is produced by multiplying the then current salary of each justice or judge by the percentage by which the figure representing the California consumer price index as compiled and reported by the California Department of Industrial Relations has increased in the previous calendar year."

Section 68203 was again amended in 1976, effective January 1, 1977, to provide:

"On July 1, 1978, and on July 1 of each year thereafter the salary of each justice and judge named in Sections 68200 to 68202, inclusive, shall be increased by that amount which is produced by multiplying the then current salary of each justice or judge by the percentage by which the figure representing the California consumer price index as compiled and reported by the California Department of Industrial Relations has increased in the previous calendar year, but not to exceed five percent (5%)." (Emphasis added.)

Section 68203 was further amended in 1979, effective January 1, 1980, as follows:

"On July 1, 1980, and on July 1 of each year thereafter the salary of each justice and judge named in Sections 68200 to 68202, inclusive, shall be increased by that amount which is produced by multiplying the then current salary of each justice or judge by the average percentage salary increase for the current fiscal year for California State employees but not to exceed five percent, provided, however that if in either of the two previous fiscal years the average salary increase for state employees was less than five percent, the judges or justices shall in addition receive that portion "(b) For the purposes of this section, salary increases for state employees shall be such increases as reported by the California Office of Employee Relations.

of a current increase in excess of five percent which they would have been entitled to had the increases in the two previous fiscal years each been equal to five percent.

"(c) The salary increase for judges and justices made on July 1, 1980, for the 1980-81 fiscal year, shall in no case exceed five percent." (Emphasis added.)

The pension to which retired judges and spouses of deceased judges were and are entitled is a percentage of the salary payable at the time payment of the pension falls due to the judge holding the judicial office to which such retired or deceased judge was last elected to or appointed.

Olson v. Cory I, held that the 1976 amendment to Government Code section 68203 could not be applied constitutionally to (1) judges during any term or any unexpired term of a predecessor judge if some portion of such term (a "protected term") was served prior to January 1, 1977; and to (2) judicial pensioners whose benefits are based on some proportionate amount of the salary for the office of such judges. The court declared that all sitting judges have, during their term of office, contractual rights to the compensation provided by law at the commencement of the term; and judicial pensioners have vested rights. The court noted that this decision would create a disparity in salaries and that such "... disparity will continue, in the case of trial judges, no later than the first Monday in January 1981 and, in the case of appellate justices, no later than the first Monday in January 1987." (27 Cal.3d at p. 547, 178 Cal.Rptr. 568, 636 P.2d 532.)

The state constitutional amendment in November 1980 was intended to eliminate that disparity. The ballot pamphlet described the change:

"Because of the court's ruling, there is now a two-tier salary structure for judges, one based on the 1976 law and a higher one based on the 1969 law. Thus, as of January 1981:

"Four associate judges of the Supreme Court will be paid $88,685 annually, while the other two associate judges will be paid $72,855.

"Twenty-three judges of the courts of appeal will be paid $83,143, while the other 36 judges of these courts will be paid $63,303.

"As their terms expire, the base salaries of the judges receiving these higher amounts will be reduced to the same levels as those paid to the other judges whose salary increases are limited to 5 percent annually.

"Pensions of certain retired judges and their survivors also increased as a result of the Supreme Court's ruling, because pension benefits are tied to active judges' salaries. Generally, a retired judge receives an allowance equal to either 65 percent or 75 percent of the current salary paid to the judge holding the office to which the retired judge was last elected.

"Proposal:

"This measure would amend the State Constitution to produce the following effects:

"It would eliminate, effective January 1, 1981, the additional pay being received by each judge whose base salary was increased as a result of the Supreme Court's ruling.

"It would eliminate, effective January 1, 1981, the additional pension benefits being received by each retired judge (or survivor) as a result of the court's ruling.

"It would authorize the Legislature to terminate expected increases in judges' salaries during their term of office, provided that such action does not cause a reduction in the actual salaries paid to judges during their term.

"It would specifically provide that salaries of judges are not considered an obligation of contract."

The controller is paying plaintiffs in accordance with article III, section 4, as amended November 4, 1980.

THE ISSUES

1. Is article III, section 4 of the California Constitution, as amended, ineffective as applied to the "protected" class of judges under the:

a. Impairment of contracts clause of the federal Constitution?

b. Due process clause of the 14th Amendment to the federal Constitution?

2. Is article III, section 4, of the California Constitution, as amended, ineffective as applied to the "protected"...