Court Overturns PERB’s Decision On San Diego Pension Reform

City of San Diego v. PERB (Court of Appeal Case No. D069630) (Issued on 4/11/17)

I’ve been waiting for this decision for a long time. I first wrote about this case in 2012. (Click here for my blog post) For those of you unfamiliar with the facts, here is an abbreviated version.

Everyone knows the current system of public sector pensions is unsustainable. In 2012, the citizens of the City of San Diego (City) addressed this issue through the “Citizens Pension Reform Initiative” (CPRI). Among the biggest supporters of the CPRI was the Mayor of San Diego, Jerry Sanders. Although Mayor Sanders was in full support of the CPRI, the City Council was not. So to make it onto the ballot the supporters of the CPRI had to qualify it as a citizen’s initiative. CPRI supporters gathered over 145,000 signatures to qualify the CPRI which become Proposition B on the ballot.

The unions in San Diego were strongly opposed to CPRI. They filed an unfair practice charge with PERB arguing that the City was required to bargain the CPRI with the unions, and that the bargaining should have occurred before the measure was placed on the ballot. The union’s theory was that since Mayor Sanders was publicly campaigning for the CPRI, the initiative was essentially sponsored by the City and therefore bargaining was required under the seminal case of People ex re. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591 (“Seal Beach”). PERB agreed.

In an unprecedented move, PERB went to court to seek an injunction to remove Proposition B from the ballot so that the citizens of San Diego could not vote on it. (Click here for my blog post) PERB’s request was denied. On election day June 5, 2012, Proposition B was overwhelmingly approved with over 65% of the vote.

However, the unfair practice charge proceedings continued before PERB. The PERB ALJ found that the City violated the law by not bargaining the CPRI with the unions under the same theories advanced initially by PERB in court. The case then went before the Board which affirmed the ALJ’s proposed decision. But today the Court of Appeal “annulled” PERB’s decision in its entirety.

The court held that Seal Beach’s requirement to bargain over ballot measures does not apply to a citizen’s initiative. The Court also held that Mayor Sander’s public support and endorsement of Proposition B did not transform the citizen’s initiative into a city-sponsored one.

Comments:

Full disclosure: I assisted the City in the underlying PERB proceedings so I am not an objective observer. I have always strongly believed that PERB overstepped its authority in trying to remove Proposition B from the ballot.
Although the Court did not put it in these terms, here is how I have always viewed this case. Under the California Constitution, the citizens of the state have the right to place initiatives on the ballot. By doing so the citizens can avoid having to go through the Legislature and Governor. Indeed, the citizens can utilize the initiative process to intentionally bypass the Legislative and Governor. People outside of California look at our system and think it’s a crazy way to make law. But that’s California.
What PERB failed to understand in this case is that under the initiative process the citizens of San Diego had the right to intentionally bypass the city council and to bypass any requirement to bargain with the union. In other words, the citizens had the right to say, “We don’t want to bargain with the unions; we want to vote on our own measure.” PERB simply could not accept this fact.
What effect will this case have in the future? Obviously, this case was important for San Diego. But for other jurisdictions, this case provides an alternative route for those situations where collective bargaining has not produced the results demanded by the public. Getting an initiative on the ballot is not easy; so it’s not as if collective bargaining will regularly take place at the ballot box in the future. But for those important issues where the unions and employer have not been able to make progress, we could see the people resort to the initiative process like they did here.