Olson v. Cory
| Decision Date | 11 June 1979 |
| Parties | Lester E. OLSON, Robert L. Bostwick, Kenneth Williams, Pat Mullendore, Newell Barrett, Roberta Ralph, Lawrence E. Drumm, Vincent N. Erickson, Maurice J. Hindin, Thomas A. Newell, Benjamin Landis, M. Peter Katsufrakis, Kathleen D. Kurland, and all others similarly situated, Plaintiffs and Respondents, v. Kenneth CORY as Controller of the State of California, Mark H. Bloodgood as Auditor-Controller of the County of Los Angeles, Defendants and Appellants. Civ. 53608. |
| Court | California Court of Appeals Court of Appeals |
Jerome B. Falk, Jr., Ann Brick, Howard, Prim, Rice, Nemerovski, Canady & Pollak, San Francisco, for defendants and appellants. Kenneth Cory, Controller of the State of California.
William H. Levit, Stroock & Stroock & Lavan, Gibson, Durn & Crutcher, Richard Chernick, Wayne W. Smith, Daniel Q. Callister, Los Angeles, for plaintiffs and respondents.
Declaratory Relief. The question is whether elimination of a prospective cost-of-living increase in judicial salaries reduces those salaries in violation of the California Constitution or impairs the obligation of contracts by infringing vested or accrued rights.
In September 1976 the Legislature amended existing law to eliminate the prospective cost-of-living increase in judicial salaries scheduled to take effect in 1977 and to restrict future annual cost-of-living increases starting in 1978 to a five percent maximum. During the year 1976 the California consumer price index increased by 5.427 percent. After the Controller announced he would follow the provisions of the newly-amended law and refuse to pay the increased judicial salaries called for by the former law, plaintiffs, who are active judges, retired judges, and judicial pensioners, brought a class action in declaratory relief against defendant Controller seeking a declaration that the newly-amended law is unconstitutional.
The relevant statutory and constitutional provisions are:
California Constitution, article III, section 4:
California Constitution, article VI, section 19:
"The Legislature shall prescribe compensation for judges of courts of record."
Government Code, section 68203, as it read prior to its 1976 amendment:
". . . 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."
Government Code, section 68203 after its amendment on September 22, 1976 "On July 1, 1978, and on July 1 of each year thereafter the salary of each justice and judge named in Sections 68200 to 68200, 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%)." (Adopted September 22, 1976, effective January 1, 1977.)
The trial court declared the 1976 amendment (1) invalid for judges serving current terms of office as an unconstitutional reduction in salary, (2) invalid for retired judges and judicial pensioners as an impairment of the obligation of contracts, (3) inseverable in its application to new judges from its application to sitting judges and judicial pensioners. As a consequence the court adjudicated the 1976 amendment invalid in its entirety.
Plaintiffs support the adjudication of the trial court with three legal arguments:
(1) The amendment to section 68203 reduces the salaries of judges during their term of office, contrary to article III, section 4, of the California Constitution.
(2) In changing the rights of judicial pensioners the amendment impairs the obligation of contracts, in violation of both state (article I, section 9) and federal (article I, section 10), constitutions.
(3) Even if the reduction in judges' salaries could be applied to judges who entered their term of office after January 1, 1977, the Legislature did not intend to create two classes of judges performing identical services at different rates of salary. Severance of the valid from the invalid portions of the amendment was not contemplated under the statute, and hence the entire amendment falls.
More generally, plaintiffs argue that judges who served during the period 1969 to 1976 and whose terms of office continued beyond 1976 served under the protection of a cost-of-living adjustment statute, whose provisions formed a valuable part of their compensation which could not be taken from them during their term of office or after their retirement.
The defendant controverts each of these arguments.
We evaluate the issues somewhat differently from the parties and will discuss them under the following headings:
(1) Do judicial pensioners possess an independent basis from that of active judges for attacking the amendment to section 68203?
(2) Does amended section 68203 amount to a reduction in salary contrary to article III, section 4, of the California Constitution?
(3) Does amended section 68203 impair the obligation of contracts by infringing vested or accrued rights in violation of the state and federal constitutions?
1. Members of this court may adjudicate the cause even though each is financially interested in the outcome of the litigation. Ordinarily, a justice may not pass judgment on any cause in which he has a personal interest, but when all justices in the state are, or may be, financially interested in the outcome, any of them may sit. (Evans v. Gore (1920) 253 U.S. 245, 40 S.Ct. 550, 64 L.Ed. 887; Atkins v. United States (Ct.Cl.1977) 556 F.2d 1028, 1035-40, cert. denied (1978) 434 U.S. 1009, 98 S.Ct. 718, 54 L.Ed.2d 751; Caminetti v. Pac. Mut. L. Ins. Co. (1943) 22 Cal.2d 344, 366, 139 P.2d 908; Brenkwitz v. City of Santa Cruz (1969) 272 Cal.App.2d 812, 818, 77 Cal.Rptr. 705; Barkin v. Board of Optometry (1969) 269 Cal.App.2d 714, 719-20, 75 Cal.Rptr. 337; Gonsalves v. City of Dairy Valley (1968) 265 Cal.App.2d 400, 404-05, 71 Cal.Rptr. 255.) In such instances courts function under a rule of necessity, which means that disqualification of all judges disqualifies none. The application of this rule has been discussed at length in Atkins v. United States, supra, a class action on behalf of all federal 2. Judges of the Supreme Court, the courts of appeal, the superior courts, and the municipal courts are elected state officers. (Cal.Const., art. VI, §§ 1, 16.)
judges to recover additional compensation for their services as judges, and the exhaustive discussion of the issue in Atkins (pp. 1035 to 1040) makes further discussion here unnecessary. Under the rule of necessity this court, to which the cause was transferred by the California Supreme Court, is both qualified and obligated to decide the cause.
3. The 1976 amendment to section 68203 brought about no absolute reduction in the dollar amount of any judicial salary or pension and operated only in respect to future increases.
4. No claim is made that judges are constitutionally entitled to cost-of-living increases to offset the effects of inflation and preserve the purchasing power of their salaries. Such an argument was recently made on behalf of federal judges and rejected by the United States Court of Claims in Atkins v. United States (Ct.Cl.1977) 556 F.2d 1028, cert. denied (1978) 434 U.S. 1009, 98 S.Ct. 718, 54 L.Ed.2d 751. Judges, like others, must take their chances with inflation (at least to the point at which inflation makes nominal the purchasing power of their salaries), and judges must share in the general hardships that result from a depreciating dollar. (Cf. Myers v. English (1858) 9 Cal. 341, 342, 344, Legislature may require payment of judges' salaries in paper instead of gold.)
Until 1964 judicial salaries were fixed in specified amounts by legislative act. For example, Government Code section 68200 set out the annual salary of the Chief Justice of California in a specified amount, and sections 68201 and 68202 did the same for other judges.
But in 1964 the Legislature passed Government Code section 68203, which provided for automatic increases in judicial salaries every four years, starting September 1, 1968, based upon increases during the period in per capita personal income in California. (Gov.Code, § 68203, Stats. 1st Ex.Sess.1964, ch. 144, § 4, p. 518.) In 1969, section 68203 was amended to provide annual salary increases based on increases in the California consumer price index during the preceding year (Stats.1969, ch. 1507, § 1, p. 3086). Because the annual increase took effect on September 1, an eight-month time lag resulted. The operation of these provisions brought judicial salaries to the following levels on September 1, 1976:
Chief Justice $66,869
Supreme Court Justice 62,935
Court of Appeal Justice 59,002
Superior Court Judge 49,166
Municipal Court Judge 45,235
On September 22, 1976, the Legislature amended Government Code sections 68200, 68201, and 68202 to set out these amounts of salary, and at the same time it amended section 68203 (Stats.1976, ch. 1183, § 4, p. 5287, effective January 1, 1977) to freeze judicial salaries until July 1, 1978 and put a five percent maximum on all...
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Staniforth v. Judges' Ret. Sys.
...salaries and pension payments because interest was not payable until after Olson I was decided and, until “this court's 1980 decision in Olson v. Cory I [determined] that the 1976 amendment to section 68203 was invalid as to certain judges and pensioners during certain periods ” ( Olson III......