Wednesday, June 27, 2018
C.A. Affirms Order to State for Back Payments to Judges
In Mallano v. Chiang II, Court Rejects Argument That Judge Berle Lacked the Power To Require Disbursements Where Complaint Only Sought Declaratory Relief
By a MetNews Staff Writer
Retired Court of Appeal Presiding Justice
The Court of Appeal for this district yesterday affirmed an order that the State of California provide millions of dollars in back pay to judges who have been short-changed for years, in violation of the mandate in Government Code §68203 that judicial salaries “shall be increased” annually by the average percentage of salary increases of state employees.
This is the second opinion in the case of Mallano v. Chiang in which Robert Mallano, in January 2014—four weeks before he retired as Court of Appeal presiding justice in this district’s Div. One—sued then-state Controller (now Treasurer) John Chiang and others for declaratory relief, in what became a class action. It is estimated that more than $36 million is at stake and more than 3,000 sitting and retired judges are affected.
In Mallano I, handed down April 5, 2017, Justice Victoria Chavez wrote for Div. Two in affirming a March 10, 2016 judgment by Los Angeles Superior Court Judge Elihu Berle in favor of the judges. There, Chavez rejected the state’s 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 factored in, declaring: “The plain meaning of the words ‘salary increase” used in section 68203(a) is the amount by which a salary is made larger.”
No Back Payments
Despite the declaratory judgment, the state made no payments of back salary and interest. Mallano proceeded on June 19, 2017, to file a motion for an order enforcing the judgment, which Berle granted on July 28, 2017.
On appeal, the Office of Attorney General argued that Berle lacked the power to order payment of money in an action in which only declaratory relief was sought.
“We reject the defendants’ arguments concerning the trial court’s authority to order payment of back wages and benefits,” Chavez said in Mallano II—which, like Mallano I, was not certified for publication. “California law establishes that in a declaratory relief action a court has the power to award damages, even when the complaint has no request for damages.”
Chavez went on to say:
“Established California law also contradicts defendants’ position that declaratory relief cannot redress past harm. California courts have long recognized that while declaratory relief operates prospectively, past wrongs may also be redressed in an action seeking such relief.”
The jurist said Berle had the authority to issue an order to the state to make pay, having retained jurisdiction to enforce the judgment.
She found no merit in the contention of the Attorney General’s Office that Berle failed to permit the defendants to litigate their affirmative defenses, including statutes of limitations, saying that they had the opportunity, but did not produce adequate supporting evidence. She quoted Berle as finding:
“Defendants have failed to present sufficient evidence or legal authority to support any of their eighteen affirmative defenses.”
Rate of Interest
Chavez declined to address the state’s assertion that interest on the judgment at 10 percent per annum was unlawful. She noted that the opinion in Mallano I affirmed the 2016 judgment, including the declaration that interest was due in the amount of 10 percent, and the issue was, in any event, forfeited by virtue of failing to raise it in the trial court.
The case is Mallano v. Chiang, B285285.
Raoul D. Kennedy, Jack P. Dicanio, and William J. Casey of Skadden, Arps, Slate, Meagher & Flom represented Mallano and members of the class, which is divided into sub-classes depending on when the judges took office. Pension benefits were prospectively reduced, with those subject to the Judges’ Retirement System (“JRS”) drawing less than those coming under the Judges’ Retirement System II (“JRS II”).
Class members are identified in a footnote as:
“(1) all California state judges of the Superior Court or justices of the Supreme Court or Court of Appeal who were active since the commencement of fiscal year 2008-2009; (2) all persons who are receiving or since the commencement of fiscal year 2008-2009, have received benefits from JRS; and (3) all persons who are receiving, or have received benefits from JRS II based on a final compensation that includes salary paid at any time since the commencement of 2008-2009.”
Deputy Attorneys General Jennifer M. Kim and Jonathan E. Rich acted for the defendants—Chiang and the two retirement systems.
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