Metropolitan News-Enterprise


Thursday, April 6, 2017


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C.A. Upholds Mallano Class Action Ruling, Says State Owes Judges Millions





Retired C.A. Presiding Justice

The state of California has failed to provide judges with salary increases mandated by statute, the Court of Appeal for this district ruled yesterday.  

In an opinion by Justice Victoria Chavez of Div. Two, the panel said Los Angeles Superior Court Judge Elihu Berle was correct when he sided with the state’s judges in a class action brought by retired Court of Appeal Presiding Justice Robert Mallano.

Mallano filed suit in January 2014, four weeks before he retired from the bench, naming then-state Controller John Chiang and others as defendants. Berle ruled two years ago that that the judges are entitled to a declaration that the state has not paid them the amounts mandated by Government Code §68203.

That section provides that judicial salaries “shall be increased” each year by the average percentage of salary increases of state employees, and shall not be subject to the discretion of state officials.

State employees, Berle noted, receive average salary increases of 0.97 percent for fiscal year 2007-08, and increases of 0.10 percent and 0.11 percent in the following two years. There were then no increases for two years; and then increases of 0.22 percent, 1.83 percent, and 2.4 percent for FY 2013-14, 2014-15, 2015-2016, respectively, the judge said, citing California Department of Human Resources (“CalHR”) statistics.

The judges, he declared, are entitled to their mandated increases, based on the CalHR statistics, plus interest of 10 percent per year, court costs, and attorney fees of nearly $660,000 pursuant to the private attorney general statute.

Unpublished Opinion

Chavez, in an unpublished opinion, said Berle correctly interpreted the statute, and that he did not abuse his discretion by granting declaratory relief. Berle held that the state has been out of compliance with the statute since 2008.

Chavez, like the trial judge, rejected the argument that “decreases” in state employee compensation, including those resulting from furloughs imposed during the fiscal years beginning July 1, 2009 and July 1, 2010, should be figured into the calculation.

 “The plain meaning of the words ‘salary increase” used in section 68203(a) is the amount by which a salary is made larger,” the justice wrote. If the Legislature had intended otherwise, she said, it would have used phrases like “increase or decrease,” “net increase,” or “change,” as it has in other statutes.

She also noted that the statute has a provision that any dollar limitation imposed on state employee increases will be similarly applied to judicial salary increases. “There is no similar provision limiting judicial salary increases during fiscal years in which state employee salaries are effectively decreased, and we decline to read one into the statute,” Chavez wrote.

Another part of the statute, she noted, explains that the “salary increases” used to calculate judicial pay are those reported by the California Department of Human Resources—known in government parlance as CalHR—and makes no mention of reporting salary decreases.

Nor, she wrote, is the state’s argument consistent with the legislative history or with the calculations CalHR made during the years prior to the filing of Mallano’s suit.

Budget Trailer Bill

A budget trailer bill enacted last year, providing, among other things, that “average pay” under §68203 will take into account dimunution or elimination of salaries through furloughs or leaves, does not affect the result, Chavez went on to say. The bill, she noted, says that the amendment is not intended “to create an inference about the legal effect of the statute prior to the enactment of this act.”

The justice also concluded that the trial judge did not abuse his discretion in awarding the plaintiff attorney fees, rejecting the argument that the action only benefitted judges and not the public interest. “Judicial compensation is a matter of statewide concern, as it is the principal means of protecting the independence of the judicial branch,” she wrote.

The requisites for an award under Code of Civil Procedure §1021.5 are further met, she said, because the litigation preserved judges’ vested constitutional rights to salary and benefits, affected a large class—at least 1,600 active judges and justices, and at least 1,800 judicial retirees and survivors, whose benefits are tied to judicial salaries—and involved issues well beyond Mallano’s personal stake, which was less than $18,000.

She also rejected the contention that the award was improper because Mallano was not personally obligated to pay his lawyers. Nothing in the statute requires such an obligation, she explained.

Chavez declined to address a provision in the trailer bill stating that “any award of interest on an order to pay unpaid salary or judicial retiree benefits pursuant to this section shall not exceed the rate of interest accrued on moneys in the Pooled Money Investment Account.” Mallano criticized the provision in a MetNews interview last year, saying it would reduce the trial judge’s 10 percent interest award to about 0.5 percent.

Chavez said the appellate panel couldn’t consider the issue because it was never before the trial court.

Mallano could not be reached for comment yesterday, but his attorney, Raoul D. Kennedy of Skadden Arps in Palo Alto, said in a statement:

“We are pleased with the result and hope we are nearing the point where judges and pensioners will receive the long overdue amounts to which they are entitled.”

A spokesperson for Controller Betty T. Yee said “we are studying the opinion and will be discussing the matter with the other state defendants and the Attorney General’s Office.”

The case is Mallano v. Chiang, B272124.


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