CARMEL VALLEY FIRE PROTECTION DISTRICT v. STATE OF CALIFORNIA

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Court of Appeal, Second District, Division 1, California.

CARMEL VALLEY FIRE PROTECTION DISTRICT et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA et al., Defendants and Respondents.

No. B113383.

Decided: March 31, 1999

William D. Ross and Carol B. Sherman, Los Angeles, for Plaintiffs and Appellants. Daniel E. Lungren, Attorney General, Linda A. Cabatic and Allen Sumner, Assistant Attorneys General, and Marsha A. Bedwell, Deputy Attorney General, for Defendant and Respondent State of California. Camille Shelton, Staff Counsel, Commission on State Mandates, for Defendant and Respondent Commission on State Mandates.

The legislative prerogative is to declare public policy and to provide the ways and means of its accomplishment.   We hold in this case that when the Legislature has accomplished that purpose by the enactment of a comprehensive statutory scheme enabling a statewide department (part of the executive branch) to adopt regulations to be enforced by administrative officers exercising substantial discretion, the separation of powers doctrine precludes the Legislature's exercise of supervisorial control or of some sort of veto power over the manner in which that discretion is exercised.

BACKGROUND

The California Occupational Safety and Health Act of 1973 (Cal/OSHA, Stats.1973, ch. 993, §§ 1-107, pp.1915-1955) was adopted to assure “safe and healthful working conditions for all California working men and women by authorizing the enforcement of effective standards, assisting and encouraging employers to maintain safe and healthful working conditions, and by providing for research, information, education, training, and enforcement in the field of occupational safety and health.”  (Lab.Code, § 6300.)   To accomplish those goals, the Legislature gave the Department of Industrial Relations and its Division of Occupational Safety and Health “the power, jurisdiction, and supervision over every employment and place of employment in this state, which is necessary to adequately enforce and administer all laws and lawful standards and orders, or special orders requiring such employment and place of employment to be safe, and requiring the protection of the life, safety, and health of every employee in such employment or place of employment.”  (Lab.Code, § 6307.)   The Director of the Department of Industrial Relations, and the members of the Occupational Safety and Health Standards Board, including its Chair, are appointed by and serve at the pleasure of the Governor of the State of California.  (Lab.Code, §§ 51, 140.)

In 1978, the Department adopted the Executive Orders that are the subject of this litigation.  (Cal.Code Regs., tit. 8, § 3401 et seq.;   former 8 Cal. Admin.   Code, § 3401 et seq.)   Those Orders “establish minimum requirements for personal protective clothing and equipment for fire fighters” and impose on the fire fighters' employers the duty to “ensure the availability, maintenance, and use” of the required clothing and equipment.   (Cal.Code Regs., tit. 8, § 3401, subds. (a), (b)(2).)   As a result of these Executive Orders, all California employers, including local governmental agencies, are required to provide the designated clothing and equipment for their fire fighting employees.   At the time the Executive Orders were adopted by the Department, the state had a statutory duty to reimburse local governmental entities for the costs they incurred in compliance with new state-mandated programs.  (Former Rev. & Tax.Code, § 2207.) 1  Since the obligation imposed by the Executive Orders constituted a state-mandated program, the state was obligated to reimburse local governmental entities for the costs they incurred in compliance with the Executive Orders.  (Carmel Valley Fire Protection Dist. v. State of California (1987) 190 Cal.App.3d 521, 530-531, 533-537, 234 Cal.Rptr. 795 [“Carmel Valley I” ].)

On November 6, 1979, the voters of California adopted Proposition 13 which, among other things, imposed a constitutional duty on the state to reimburse local governmental agencies for the costs they incurred by their compliance with specified state-mandated programs.   To this end, article XIII B, section 6, of the California Constitution provides:  “Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the State shall provide a subvention of funds to reimburse such local government for the costs of such program or increased level of service․”  In effect, Proposition 13 is a constitutional direction for “state subvention similar in nature to that required by the preexisting [statutory] provisions of [the] Revenue and Taxation Code․”  (Carmel Valley I, supra, 190 Cal.App.3d at p. 543, 234 Cal.Rptr. 795.)

In the years following the adoption of Proposition 13, the state failed to appropriate funds to reimburse local governmental agencies for their costs of compliance with the Executive Orders.   As a result, several fire protection districts filed petitions for writs of mandate and complaints for declaratory relief in which they sought orders compelling the state to reimburse them for their expenditures of mandated costs.   The districts prevailed, and in 1987 those judgments were affirmed by Division Five of our court.  (Carmel Valley I, supra, 190 Cal.App.3d at pp. 533, 537-538, 234 Cal.Rptr. 795 [the costs incurred by local governmental agencies in compliance with the Executive Orders are state-mandated costs within the meaning of article XIII B, section 6, of the California Constitution].)   For the next few years, the state complied with Carmel Valley I and reimbursed local governmental agencies for their compliance costs.   But when the state started to run out of money (Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155, 163, 6 Cal.Rptr.2d 714 [during fiscal 1991 and 1992, the state faced an “unprecedented budgetary crisis” with a possible $14 billion shortfall] ), the Legislature responded by enacting a statute that “ suspends” compliance with state-mandated programs when specified conditions are met, Government Code section 17581 (Stats.1990, ch. 459, § 1, pp.2016-2017):

“(a) No local agency shall be required to implement or give effect to any statute or executive order, or portion thereof, during any fiscal year and for the period immediately following that fiscal year for which the Budget Act has not been enacted for the subsequent fiscal year if all of the following apply:  [¶] (1) The statute or executive order, or portion thereof, has been determined by the Legislature, the commission [on state mandates], or any court to mandate a new program or higher level of service requiring reimbursement of local agencies pursuant to Section 6 of Article XIII B of the California Constitution.  [¶] (2) The statute or executive order, or portion thereof, has been specifically identified by the Legislature in the Budget Act for the fiscal year as being one for which reimbursement is not provided for that fiscal year.   For purposes of this paragraph, a mandate shall be considered to have been specifically identified by the Legislature only if it has been included within the schedule of reimbursable mandates shown in the Budget Act and it is specifically identified in the language of a provision of the item providing the appropriation for mandate reimbursements. [¶] (b) Notwithstanding any other provision of law, if a local agency elects to implement or give effect to a statute or executive order described in subdivision (a), the local agency may assess fees to persons or entities which benefit from the statute or executive order.   Any fee assessed pursuant to this subdivision shall not exceed the costs reasonably borne by the local agency․”  (Stats.1998, ch. 681, § 5, italics added;  subsequent references to “section 17581” are to that section of the Government Code as presently drafted.)

Section 17581 was applied to the Budget Act of 1992 (and thereafter to each succeeding Budget Act), and the Executive Orders were (and remain) suspended under the plain language of section 17581.  (See, e.g., Stats.1992, ch. 587;  Stats.1993, ch. 55;  Stats.1994, ch. 139.)   At least some fire protection districts nevertheless continued to comply with the Executive Orders, but their requests to the state for reimbursement were denied.

In 1995, the Carmel Valley Fire Protection District submitted a claim to the Commission on State Mandates, requesting a determination that the State was obligated to reimburse the District for the funds it spent in compliance with the Executive Orders.2  The Commission denied the District's claim.   The District then filed a petition for ordinary and administrative mandate and a complaint for declaratory relief, naming the state and the Commission as respondents and defendants.   After a hearing, the trial court found that the clothing and equipment requirements imposed by the Executive Orders were validly suspended by section 17581 and that, as a result, the costs incurred by the District by providing those items were not state-mandated costs.   The Carmel Valley Fire Protection District appeals from the judgment entered against it.3

DISCUSSION

 The District contends the Legislature violated the separation of powers doctrine by its enactment of section 17581, thereby “usurping the enforcement authority” of the Department of Industrial Relations.   More specifically, the District contends the Legislature's adoption of Cal/OSHA and the legislative delegation to the Department of the power to adopt the Executive Orders amounted to a complete divestiture by the Legislature of the rights it might otherwise have had to do what it has attempted to do with section 17581.   It follows, says the District, that the Legislature's enactment of section 17581 is an unauthorized exercise of supervisorial power over the Department.   We agree with the District.

 It is the Legislature's prerogative to declare public policy and to provide the ways and means of its accomplishment.  (Lincoln Property Co. No. 41, Inc. v. Law (1975) 45 Cal.App.3d 230, 234, 119 Cal.Rptr. 292.)   To that end, it can enact, amend and repeal the laws of this state, including those that govern occupational safety and health.   Indeed, the Legislature can repeal Cal/OSHA, in whole or in part.  (California Radioactive Materials Management Forum v. Department of Health Services (1993) 15 Cal.App.4th 841, 872, 19 Cal.Rptr.2d 357.)   Alternatively, the Legislature can accomplish an implied repeal of an administrative regulation by enacting a statute directly contrary to the obligations imposed by the regulation.  (State of Ga. by Dept. of Med. Assist. v. Heckler (11th Cir.1985) 768 F.2d 1293, 1299 [an agency regulation which conflicts with a statute is without any legal effect].)

 But when the Legislature intrudes into an area occupied by the executive branch, the separation of powers doctrine will ordinarily preclude enforcement of the offending statute or act.  (Cal. Const., art.   III, § 3 [“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”].)   The fundamental purpose of this separation is to check the extent of power exercisable by any one branch of government, “not to promote efficiency but to preclude the exercise of arbitrary power” and “to save the people from autocracy.”  (Myers v. United States (1926) 272 U.S. 52, 293, 47 S.Ct. 21, 71 L.Ed. 160, Brandeis, J., dissenting). 4

 By reason of the separation of powers doctrine, the Legislature's power to declare public policy does not include the power to carry out its declared policies.   That job belongs to the executive branch of government and its administrative agencies.  (California Radioactive Materials Management Forum v. Department of Health Services, supra, 15 Cal.App.4th at pp. 870-871, 19 Cal.Rptr.2d 357;  Ray v. Parker (1940) 15 Cal.2d 275, 291, 101 P.2d 665;  People v. Western Air Lines, Inc. (1954) 42 Cal.2d 621, 630-632, 268 P.2d 723.)   Accordingly, the Legislature's grant of authority to the Department of Industrial Relations to execute the provisions of Cal/OSHA by (among other things) adopting the regulations necessary to carry out the legislatively declared public policy in favor of workplace safety (Lab.Code, § 6307) left the Legislature without the power to “exercise supervisorial control or to retain for itself some sort of ‘veto’ power over the manner of execution of the laws.”  (California Radioactive Materials Management Forum v. Department of Health Services, supra, 15 Cal.App.4th at p. 872, 19 Cal.Rptr.2d 357.)   The Legislature must abide by its delegation of authority until that delegation is legislatively altered or revoked by a repeal of the enabling statute or by the enactment of an overriding law, or in some other lawful manner.  (Ibid.)

In a slightly different context, the point is illustrated by State Board of Education v. Levit (1959) 52 Cal.2d 441, 343 P.2d 8.   There, the Board of Education (acting pursuant to a then-existing constitutional mandate to select the textbooks used throughout the state) approved two science textbooks for use in California's elementary schools.   The Legislature, with sufficient funds available, refused to pay for the selected books.   The Board of Education applied to the courts for an order compelling payment, which our Supreme Court held should have been granted by the trial court.   As Levit explains, the Legislature had the right to curtail curriculum and eliminate altogether the use of textbooks for all science classes, but once having decided that textbooks would be used for those classes, the Legislature had no power to interfere with the Board's selection of the books to be used.  (Id. at pp. 465-466, 343 P.2d 8.) 5

So viewed, section 17581 is nothing more than an impermissible attempt to exercise supervisorial control over the manner in which the Department of Industrial Relations executes the laws enacted by the Legislature.   Whatever power the Legislature might have to repeal Cal/OSHA in whole or in part, or to enact an inconsistent statute that would accomplish an implied repeal of the Executive Orders, it does not have the power to cherry-pick the programs to be suspended-which is precisely what the Legislature has done by suspending the operation of only those “executive order[s], or portion [s] thereof, [that] ha [ve] been specifically identified by the Legislature in the Budget Act for the fiscal year as being [those] for which reimbursement is not provided for that fiscal year.” (§ 17581, subd. (a)(2).)   By suspending operation of the Department's order that the specified items of clothing and equipment are necessary for the safety of fire fighters, the Legislature has attempted to exercise an unconstitutional veto power over the Department's administration of Cal/OSHA.   This is not the same as enacting an inconsistent statute-that is, one to the effect that the items of clothing and equipment specified in the Executive Orders are not required for the safety of fire fighters.   To the contrary, by allowing the Executive Orders to remain in effect and authorizing local governmental entities to elect to enforce the Executive Orders and fund them at the local level (§ 17581, subd. (b)), the Legislature has conceded the merit of the Executive Orders while attempting to avoid the state's constitutionally imposed obligation to reimburse local governmental agencies for state-mandated costs (Cal. Const., art.   XIII B, § 6).  (Cf. Consumer Energy, etc. v. F.E.R.C. (D.C.Cir.1982) 673 F.2d 425, 474, summarily affd.  463 U.S. 1216, 103 S.Ct. 3556, 77 L.Ed.2d 1402 [it would be “anomalous in the extreme” to hold that the Legislature may not appoint the officials who make the rules but may enact a mechanism permitting effective legislative control over these officials' decisions].)

 We emphasize that the Legislature may retain direct control over a subject matter by enacting detailed rules of conduct to be administered without discretion by administrative officers, or it may provide broad policy guidance and leave the details to be filled in by administrative officers exercising substantial discretion.   When it chooses the first alternative, it is in practical effect the administrative decisionmaker.   Under the second alternative-as with Cal/OSHA and the Department of Industrial Relations-the Legislature is not the administrative decisionmaker and it may not, in the guise of legislation or otherwise, exercise a supervisory role over the decisionmaker appointed by another branch of government (in this case, the Governor).

Accordingly, section 17581 is constitutionally infirm as applied in this case and cannot be applied to the Executive Orders adopted by the Department of Industrial Relations.   It follows that the Executive Orders have not been “suspended,” that costs expended by the District in compliance therewith are state-mandated costs within the meaning of article XIII B, section 6, of the California Constitution and Carmel Valley I, and that the state is not entitled to a judgment in its favor.   We specifically do not order reimbursement, leaving the issues that were not decided below to be considered on remand, including (1) whether there are legal obstacles to the superior court's ability to order payment to the District for the years for which no appropriations were made for the reimbursement of the District for compliance with the Executive Orders, and (2) whether the appropriations issue is affected by our decision that section 17581 is an impermissible legislative effort to override article XIII B, section 6, of the California Constitution.6

DISPOSITION

The judgment is reversed and the cause is remanded to the trial court with directions to vacate its judgment, to enter a partial judgment in favor of the District on the issue resolved by this appeal, and to hear and decide (1) the reimbursement issues and (2) the attorneys' fees issues.   The District is awarded its costs of appeal.

FOOTNOTES

1.   As relevant, former section 2231, subdivision (a), of the Revenue and Taxation Code provided that “[t]he state shall reimburse each local agency for all ‘costs mandated by the state,’ as defined in Section 2207.”  (Former section 2231 of the Revenue and Taxation Code was repealed in 1986 and replaced by Government Code section 17561 [Stats.1986, ch. 879, §§ 6, 23, pp. 3041-3042, 3045].)

2.   Among other things, the Commission on State Mandates (the successor to the Board of Control) determines whether a law or regulation constitutes a “state mandate.”  (Gov.Code, § 17500 et seq.;   see also City of Sacramento v. State of California (1990) 50 Cal.3d 51, 62, fn. 5, 266 Cal.Rptr. 139, 785 P.2d 522.)

3.   As in the trial court, the Carmel Valley Fire Prevention District is joined on appeal by several other fire protection districts:  the Alpine Fire Protection District;  the Bonita-Sunnyside Fire Protection District;  the City of Glendale;  the City of Anaheim;  the Ventura County Fire Protection District;  the San Ramon Valley Fire Protection District;  the American Canyon Fire Protection District, a subsidiary district of the City of American Canyon;  the Salida Fire Protection District;  the West Stanislaus Fire Protection District;  the Sacramento County Fire Protection District;  the Humboldt No. 1 Fire Protection District;  the Samoa-Peninsula Fire Protection District;  and the Mammoth Lakes Fire Protection District.   Unless the context suggests otherwise, our subsequent references to “the District” are intended to include all of these appellants.   The respondents are the State of California and the Commission on State Mandates.   Unless the context suggests otherwise, our subsequent references to “the state” are intended to include both respondents.

4.   We reject the state's contention that “the separation of powers argument fails on its face” because “[r]espondents, all officers of the Executive Branch, obviously cannot infringe upon the power of the Executive Branch itself” by their adoption of the Budget Acts. The separation of powers violation occurs by the Legislature's adoption of section 17581, the statutory predicate for the state's ability to use the Budget Act to avoid reimbursement for state-mandated programs, not by reason of the state's refusal to reimburse the District.

5.   We emphasize our awareness of the difference between Levit and the present case.   Indeed, virtually all of the cases cited in this opinion are distinguishable for one reason or another.   For example, the primary issue in California Radioactive arose out of an attempt by the Senate Rules Committee to unilaterally affect a particular administrative decision.  (California Radioactive Materials Management Forum v. Department of Health Services, supra, 15 Cal.App.4th 841, 19 Cal.Rptr.2d 357.)   In short, although many of the cited cases involve the manner in which the legislative power was exercised rather than the effect of a particular statute, our view is that the same fundamental principles apply to the case now before us.

6.   At this stage of these proceedings, we summarily reject the technical issues raised by the state in response to the District's appeal.   The state has failed to explain in its brief whether these issues (e.g., the statute of limitations) were preserved below or to advance any meaningful argument in support of the conclusory positions stated in the respondents' briefs.   As far as the issue of attorneys' fees is concerned, it was not considered or decided by the trial court because the judgment rendered below was against the District.   In light of our reversal, the issue of attorneys' fees will be before the trial court on remand.  (Code Civ. Proc., § 1021.5.)

MIRIAM A. VOGEL, J.

ORTEGA, Acting P.J., and MASTERSON, J., concur.