Fresno Police Officers Ass'n v. State of California

[415]Opinion

HANING, J. In this consolidated appeal plaintiffs/appellants Fresno Police Officers Association, Oakland Police Officers Association, the Organization of Deputy Sheriffs of San Mateo County, Bill Betzold, Robert Foster, and Frank Kastell appeal a judgment after court trial in favor of defendants/respondents State of California and State Controller Kenneth Cory in appellants’ action for inverse condemnation. Appellants contend their employment agreements with their employing agencies constitute property interests which the state took or damaged without just compensation when it refused to pay interest on salary increases withheld pursuant to Government Code sections 16280 and 16280.5,1 after those statutes were declared unconstitutional in Sonoma County Organization of Public Employees v. County of Sonoma (1979) 23 Cal.3d 296 [152 Cal.Rptr. 903, 591 P.2d 1]. Appellants also contend the trial court abused its discretion in denying class certification.

Appellants are local public employee organizations and individual public employees whose employment agreements with their employing agencies entitled them to receive cost-of-living salary increases for the fiscal year 1978-1979. Following the passage of Proposition 13 (Cal. Const., art. XIII A [limiting the revenue local entities can raise through property taxes]) in June 1978, the Legislature enacted chapter 4 (§§ 16280-16285) of the Government Code, effective June 30, 1978. Chapter 4 authorized distribution of surplus funds in the state treasury to local governmental agencies “to alleviate the current fiscal crisis created by the passage of Proposition 13 ... and to provide for maintaining essential services which would otherwise be lost.” (§ 16281.) Section 16280 prohibited the distribution of state surplus to any local agency granting its employees a cost-of-living salary increase for 1978-1979 exceeding the cost-of-living increase provided for state employees. Section 16280.5 prohibited distribution of surplus funds to local agencies providing an increase in salary in 1978-1979 to elected or appointed non-civil service officers. Any agreement providing for a cost-of-living salary increase to local employees in excess of that granted state employees was declared null and void.

In February 1979 Sonoma County Organization of Public Employees v. County of Sonoma, supra, 23 Cal.3d at p. 321, held that sections 16280 and 16280.5 violated both the state (Cal. Const., art. I, § 9) and federal (U.S. Const., art. I, § 10) Constitutions as an impairment of the obligations of contract, and as violative of the home rule provision of article XI, sections 4 and 5 of the California Constitution.2 The Supreme Court ordered the local