(City & County of San Francisco Super. Ct. No. CPF-09-509205). Peter J. Busch, Judge.
The opinion of the court was delivered by: Pollak, J.
CERTIFIED FOR PUBLICATION
Defendants Arnold Schwarzenegger, in his capacity as the Governor of California, and David Gilb, in his capacity as the Director of the Department of Personnel Administration (DPA), appeal from an order and judgment granting a petition for writ of mandate prohibiting defendants from implementing furloughs for employees of the State Compensation Insurance Fund (SCIF). Defendants argue that the court erred in failing to stay this action under the doctrine of exclusive concurrent jurisdiction and, alternatively, that the court incorrectly determined that Insurance Code*fn1 section 11873 prohibits the Governor from furloughing SCIF employees. We shall affirm.
Factual and Procedural History
On December 19, 2008, the Governor issued Executive Order No. S-16-08. The order recites that the state is facing a fiscal and cash crisis and that the general fund deficit was projected to grow to $42 billion over the following 18 months. Finding that "a furlough will reduce current spending and immediately improve the State's ability to meet its obligations to pay for essential services," the order directs the DPA to "adopt a plan to implement a furlough of represented state employees and supervisors for two days per month, regardless of funding source. This plan shall include a limited exemption process."
On January 5, 2009, the California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE) filed an action in the Sacramento County Superior Court against the Governor and the Director of the DPA seeking an injunction prohibiting the Governor from implementing the furloughs for state employees. (CASE I) That petition alleges that "CASE is the exclusive collective bargaining representative of legal professionals in State Bargaining Unit 2 . . . , represent[ing] approximately 3400 legal professionals in more than 80 different state departments, boards, and commissions. Approximately 3240 members are attorneys, administrative law judges, and hearing officers who are exempt from the Fair Labor Standards Act (FLSA). All CASE members would be directly impacted if the executive order were to be implemented." The petition challenged the executive order on the grounds that the Governor lacks statutory authority to order a furlough, that salary-setting is a legislative rather than an executive function, and that the furlough would contravene provisions of the Government Code and of the memoranda of understanding between the state and the unions. The petition prayed for an order directing the Governor "to set aside the portions of the Governor's Executive Order S-16-08 calling for a furlough and salary reduction for state employed legal professionals because the Executive Order is unlawful."
On January 30, the Sacramento County Superior Court denied the petition and applications in related cases that had been consolidated with it. Before judgment was entered, the chief counsel for the state Controller's Office wrote a letter to the court, asking it to clarify whether the January 30 ruling "is applicable to employees of independently elected constitutional officers and other elected state-wide officials, including the Lieutenant Governor, Office of the Attorney General, Secretary of State, State Treasurer, Superintendent of Public Instruction and Insurance Commissioner." On February 4, the court issued a minute order providing the requested clarification. The order explained that CASE I raised issues "regarding the Governor's authority to order furloughs of [CASE] members, as employees of executive branch agencies. The independently elected constitutional officers and other elected state-wide officials referenced above were not parties to these matters. The petitions and complaints upon which the court ruled did not raise any issues regarding the Governor's authority to order furloughs for the employees of those officers and officials. The court's ruling therefore did not address, or make any ruling regarding, the Governor's authority to order furloughs for the employees of those officers and officials. Accordingly, the court expresses no views regarding that issue."
On February 10, after DPA indicated that the furlough order would be applied to SCIF employees, CASE and individual plaintiffs Glen Grossman, Mark Henderson and Geoffrey Sims filed the present action in San Francisco Superior Court against the Governor, the Director of the DPA, John Chiang, as State Controller, and Jan Frank, as President of SCIF. The petition seeks an injunction prohibiting the Governor from imposing the furloughs on CASE members employed by SCIF on the ground that section 11873 prohibits the Governor from furloughing SCIF employees. On its own motion, the trial court asked the parties to brief whether the action should be stayed under the doctrine of exclusive concurrent jurisdiction until CASE I was finally resolved. Following briefing and additional argument on the issue, the court concluded that a stay was not required, based on the Sacramento court's February 4 minute order. On the merits, the court agreed with CASE that section 11873 prohibits the Governor from furloughing SCIF employees. An order granting the writ of mandate and a corresponding judgment were entered on April 15. The Governor and Director of DPA filed a timely notice of appeal*fn2 and the trial court subsequently granted CASE relief from the automatic stay provisions of Code of Civil Procedure section 916, subdivision (a).
1. Exclusive Concurrent Jurisdiction
" `Under the rule of exclusive concurrent jurisdiction, "when two [California] superior courts have concurrent jurisdiction over the subject matter and all parties involved in litigation, the first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved until such time as all necessarily related matters have been resolved." [Citations.] The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, and preventing vexatious litigation and multiplicity of suits.' " (People ex rel. Garamendi v. American Autoplan, Inc. (1993) 20 Cal.App.4th 760, 769-770.) " `[T]he rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions. [Citations.] If the court exercising original jurisdiction has the power to bring before it all the necessary parties, the fact that the parties in the second action are not identical does not preclude application of the rule. Moreover, the remedies sought in the separate actions need not be precisely the same so long as the court exercising original jurisdiction has the power to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings.' " (Id. at p. 770.) When the rule applies, the second action should be stayed, not dismissed. (Id. at p. 771.) "The rule of exclusive concurrent jurisdiction . . . is mandatory. Thus, if the conditions are met, the issuance of a stay order is a matter of right." (Id. at p. 772.) However, "[t]he rule of exclusive concurrent jurisdiction is not `jurisdictional' in the sense that failure to comply renders subsequent proceedings void. [Citations.] [¶] Trial court error in determining application of the rule of exclusive concurrent jurisdiction is reversible only where the error results in a miscarriage of justice or prejudice to the party asserting the rule." (Ibid.)
Defendants contend that the doctrine of exclusive concurrent jurisdiction required this action to be stayed in favor of the Sacramento proceedings and that the failure to stay the action resulted in a miscarriage of justice. Defendants argue that they have been prejudiced because the trial court's ruling in this action conflicts with the ruling in CASE I and the conflicting rulings create irreconcilable adjudications of the Governor's authority to furlough CASE employees at SCIF.
The trial court considered this issue to present a "close call" and that "[b]ut for the clarification order . . . the exclusive concurrent jurisdiction argument would be rather strong." The court explained that "given the first court's statement [in the February 4 minute order] that it did not have before it the claims of CASE members who weren't employees of executive agencies, and given that SCIF is not an executive branch agency, that limited point being conceded today, . . . [t]he court did not have before it . . . the claims made by those who are before me here today." While the Sacramento court's clarifying minute order does not refer explicitly to SCIF employees, these employees are not "employees of executive branch agencies" to whom the Sacramento court considered its ruling to exclusively apply. Just as the petitions and complaints upon which the Sacramento court ruled did not raise any issues regarding the Governor's authority to order furloughs for the employees of independently elected constitutional officers and other elected state-wide officials, to whom the Sacramento court said its ruling did not apply, those pleadings made no contention with respect to the Governor's authority to order furloughs for SCIF employees, or concerning the effect of the Insurance Code provisions that are disputed in this action. Because the claims of SCIF employees were not adjudicated in CASE I, there is no conflicting adjudication as to those employees.
Defendants emphasize that the rules regarding application of exclusive jurisdiction are "different and less rigid" than those applied for res judicata purposes and do not require "absolute identity of parties." That may be true, but neither SCIF itself nor any of the individual members of CASE were parties to the Sacramento proceedings and the impact of the relevant Insurance Code provisions was not considered in those proceedings. If the Sacramento judgment is not binding as to the parties or issues in this action, no prejudice can result from considering those issues in this case. Had the trial court considered the exclusive concurrent ...