Superior Court of City and County of San Francisco, No. 509205, Peter J. Busch, Judge. (City & County of San Francisco Super. Ct. No. CPF-09-509205)
The opinion of the court was delivered by: Pollak, J.
Opinion on remand from Supreme Court
CERTIFIED FOR PARTIAL PUBLICATION*fn1
The Governor and the Director of the Department of Personnel Administration (Director) 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 (State Fund). 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*fn2 section 11873 prohibits the Governor from furloughing State Fund employees. Following remand of this case from the Supreme Court and the change in administration, the parties stipulated to the dismissal of the appeal and issuance of a remittitur affirming the trial court's judgment as the final judgment in the matter. Because the authority of the Governor to order the furlough of State Fund employees is an issue of continuing public interest, we have declined to dismiss the appeal and shall, in the published portion of this opinion, set forth the reasons for which the trial court correctly concluded that the Governor lacks such authority.*fn3 In the unpublished portion of the opinion we conclude that the trial court was also correct in refusing to stay the action. We shall therefore affirm the trial court's judgment.
Factual and Procedural History
On December 19, 2008, Governor Arnold Schwarzenegger 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 Director 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 February 10, 2009, after the Sacramento Superior Court had denied a petition seeking to prohibit the Governor from implementing the furlough order with respect to executive branch employees,*fn4 and after the Director indicated that the furlough order would be applied to State Fund 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, John Chiang, as State Controller, and Jan Frank, as president of State Fund.*fn5 The petition seeks an injunction prohibiting the Governor from imposing the furloughs on CASE members employed by State Fund on the ground that section 11873 prohibits the Governor from furloughing State Fund employees. After briefing and argument, the court agreed with CASE that section 11873 prohibits the Governor from furloughing State Fund employees. An order granting the writ of mandate and a corresponding judgment were entered on April 15. The Governor and Director filed a timely notice of appeal and the trial court subsequently granted CASE relief from the automatic stay provisions of Code of Civil Procedure section 916, subdivision (a).
On March 19, 2010, this court affirmed the judgment of the superior court. On May 19, 2010, the Supreme Court granted review (S182581) and, following its decision in Professional Engineers in California Government v. Schwarzenegger (2010) 50 Cal.4th 989, transferred the matter back to this court for reconsideration in light of that decision. After considering supplemental briefs submitted by the parties, we find nothing in the Supreme Court decision inconsistent with our prior conclusions and therefore again affirm the trial court's judgment.*fn6
1. Exclusive Concurrent Jurisdiction*fn7
" '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 State Fund.
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 [State Fund] 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 State Fund 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 statewide 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 State Fund employees, or concerning the effect of the Insurance Code provisions that are disputed in this action. Because the claims of State Fund 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 State Fund 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 ...