Opinion ID: 1224847
Heading Depth: 3
Heading Rank: 2

Heading: Effect of Chapter 433

Text: (3a) We turn then to the question whether Chapter 433 affords an independent basis for overturning the trial court's injunction and enforcement orders. Preliminarily, we observe that the trial court's injunction of April 17, 1990, has become final, and it binds the parties to this litigation unless Chapter 433 provides ground for dissolving it. (4) As we have frequently explained, the collateral estoppel doctrine precludes relitigation of an issue previously adjudicated by final judgment between the parties. (See, e.g., Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 910 [226 Cal. Rptr. 558, 718 P.2d 920].) Caltrans has never challenged the trial court's earlier findings and conclusions regarding its noncompliance with the private contracting restriction. Apart from seeking to abrogate Riley et al., Caltrans raises no challenges independent of Chapter 433 at this time. We therefore limit our present discussion to the effect of Chapter 433 on the trial court's injunction and subsequent enforcement orders.
(3b) As the Court of Appeal dissent observes, Chapter 433 contains no express or implied legislative findings that would justify vacating the trial court's injunction. By adopting Chapter 433, the Legislature has made clear it prefers private contracting in the areas it mentioned, but legislative preference affords no proper ground for excusing a constitutional violation that a trial court's final judgment previously enjoined. (5) Although courts must give legislative findings great weight and should uphold them unless unreasonable or arbitrary, ... we also must enforce the provisions of our Constitution and `may not lightly disregard or blink at ... a clear constitutional mandate.' [Citation.] ( Amwest Surety Ins. Co. v. Wilson, supra, 11 Cal.4th at p. 1252, quoting from California Housing Finance Agency v. Elliott (1976) 17 Cal.3d 575, 591 [131 Cal. Rptr. 361, 551 P.2d 1193]; see also Spiritual Psychic Science Church v. City of Azusa (1985) 39 Cal.3d 501, 514 [217 Cal. Rptr. 225, 703 P.2d 1119] [ordinary deference courts owe to legislative action vanishes when constitutionally protected rights are threatened].) As stated in the context of a First Amendment challenge to federal legislation, ... the deference afforded to legislative findings does `not foreclose [a court's] independent judgment of the facts bearing on an issue of constitutional law.' [Citations.] This obligation ... is to assure that, in formulating its judgments, Congress has drawn reasonable inferences based on substantial evidence. [Citation.] ( Turner Broadcasting System, Inc. v. FCC (1994) 512 U.S. 622, 666 [114 S.Ct. 2445, 2471, 129 L.Ed.2d 497] (lead opn. of Kennedy, J.).) (3c) Does Chapter 433 contain factually supported findings that would excuse noncompliance with the civil service mandate? In our view, none of the express or implied provisions of Chapter 433 affords a legitimate basis for disregarding the constitutional restriction on private contracting. Of course, the Legislature clearly intended Chapter 433 to expand Caltrans's ability to make these contracts. Thus, an August 1993 report of the Assembly Committee on Transportation states that although existing law requires Caltrans to show the inadequacy of existing and recruitable staff to complete project development, Chapter 433 would specify that Caltrans is not obligated to meet that or any other test relative to hiring to assimilation and productive use of civil service employees, and instead, can contract out at the discretion of the director. (Assem. Com. on Transportation, Rep. on Sen. Bill No. 1209 (1993-1994 Reg. Sess.) as amended July 14, 1993, p. 3.) In the absence of any substantial evidence supporting this legislative intent to accommodate Caltrans in circumventing the court's injunction, we must deem this purpose, however clearly expressed, insufficient to satisfy the constitutional mandate. Significantly, the same legislative report frankly acknowledged that, because the proposed legislation purported to expand by statute the authority for private contracting, questions had been raised regarding its constitutionality, and it was unclear what effect, if any, the proposed legislation would have on this contracting. ( Id. at p. 4.) The trial court found no facts to support a finding that civil service staff would be unable adequately and competently to perform the work at issue. According to the court, this finding could only be based on a study of actual workloads and available staff during particular fiscal years. Caltrans submitted no such study, and the available evidence (involving pre-1993 fiscal years) supported a contrary finding. Most provisions of Chapter 433 appear intended to dispense with, rather than to satisfy, the constitutional civil service mandate. Thus, section 14130, subdivision (d), purports to relieve Caltrans from its obligations (1) to use state employees to perform engineering and related services to the maximum extent required to meet the goals of this article, and (2) to staff at an internal level that matches its ability to assimilate and productively use new staff. As the Court of Appeal dissent indicates, this provision seems to contemplate Caltrans's use of private contracting even if it is able to use new civil service employees productively. No express or implied finding and no evidentiary support exist to sustain such a provision. Similarly, section 14130.2, subdivision (a)(2), purports to relieve Caltrans of its obligation to maintain a civil engineering staff at a level to provide services for other [local] agencies that arrange their own financing for state highway projects. As the Court of Appeal dissent observed, this provision also seems to conflict with the constitutional civil service mandate by authorizing Caltrans to contract work privately on locally funded projects even if additional civil service staff could be hired to perform it as cheaply and as promptly. In like manner, section 14130.1, which deems engineering services for the seismic safety retrofit program a short-term workload demand, is aimed, according to the Court of Appeal majority, at relieving Caltrans from its obligation to have its civil service staff perform this work. Plaintiffs observe that this finding is both factually unsupported and irrational, as every highway project could be deemed short term in the sense that it has a finite term lasting until it is completed. In any event, as the Court of Appeal dissent notes, this cryptic provision contains no basis for modifying the trial court's injunction. Section 14137, which purports to revive Caltrans's preexisting contracts despite the trial court's injunction, contains no express or implied findings that might satisfy the civil service mandate. A related provision, section 14130.3, indicates that one purpose of section 14137 was to reinstate contracts awarded to minorities, women, or disabled veterans, but section 14137 is not limited to these contracts. As the Court of Appeal dissent notes, that legislative purpose may be exemplary, but it does not afford a proper ground for noncompliance with the civil service mandate. Both the Court of Appeal majority and dissent agree that, despite the Legislature's characterization (see ง 14130, subd. (a)(5)), state highway project development is not a new state function within the exception recognized by Williams, supra, 7 Cal. App.3d at page 397. As the Court of Appeal majority correctly observes, Notwithstanding the Legislature's finding to the contrary, Caltrans's own description of the activities authorized by Chapter 433 discloses they do not constitute a new state function but simply a new technique for performing an existing function. As Caltrans readily concedes, it has always been responsible for project development of state highway projects. Under the statute as revised in Chapter 433, the state remains responsible for financing and controlling all project development work covered by section 14130 et seq. Chapter 433 simply expands Caltrans's power to contract with private entities to perform that work. We cannot accept Caltrans's legal conclusion that an `enriched' blend of private contracting to meet responsibilities historically discharged by Caltrans employees creates a `new state function' within the meaning of that test as explicated in ... Williams, supra, 7 Cal. App.3d 390. Only one provision of Chapter 433 appears drafted with a view toward demonstrating compliance with Riley. Section 14130, subdivision (a)(4), recites that private contracting has helped accelerate[] nearly one billion dollars ($1,000,000,000) worth of construction projects on the state highway system. This significant increase in project delivery capability must continue in order for the department to meet its commitments for timely project delivery. The section then contains the legislative conclusion that Without the ability to continue a stable contracting out program, ... the department will not be able to perform project delivery adequately, competently, or satisfactorily, thereby necessitating the use of private consultants to supplement its in-house staff. The Court of Appeal majority recognized that the foregoing conclusion is illogic[al], in that it states the tautology that private contracting is necessary to avoid private contracting. Yet, as the majority also notes, the section does appear to find private contracting necessary to permit Caltrans to perform its project delivery in a timely manner. Plaintiffs observe, however, that the trial court found Caltrans created an artificial need for private contracting that resulted from its practice of maintaining an inadequate level of civil service staff, rather than from any legitimate lack of available or obtainable qualified personnel. As explained below ( post, pt. IX.B.2.), the Legislature cannot simply override this factual finding by issuing a general legislative declaration that purports to cover the entire area of private contracting. Of course, under Riley, Caltrans has had and continues to have the opportunity to justify specific private contracts on the basis that they are needed to assure timely project delivery unobtainable through the available state civil service. We conclude that Chapter 433 contains no express or implied findings sufficient on their face to justify dissolving the trial court's injunction. To the extent Chapter 433's provisions conflict with the civil service mandate, they are invalid.
Even were we to conclude, for purposes of argument, that Chapter 433 contains express or implied findings to the effect that Caltrans is unable to perform the services in question adequately and competently through civil service, or that private contracting has resulted and will result in substantial cost savings or other significant advantages to the state, these findings, standing alone and without any apparent evidentiary or empirical support, would be insufficient to supplant the trial court's express findings to the contrary. Caltrans, adopting the Court of Appeal majority's similar argument, contends that ... the legislative findings themselves are ... proof ... of the propriety of private contracting sufficient to sustain the new legislation, and that the trial court's own contrary findings are trumped by more recent legislative findings of fact, which have to be respected unless palpably wrong. Clearly, however, something more is needed to trump a trial court's specific findings of fact and final adjudication of a constitutional violation of article VII than bare legislative declarations. Neither the Legislature nor the courts can satisfy article VII by the mere expediency of adopting unsubstantiated findings that purport to sustain or create an exception to the constitutional provision. As we stated in Riley, `The Legislature is prohibited from exempting any group from the merit system of employment....' [ถ] ... This court is without power to create additional exceptions by implication. ( Riley, supra, 9 Cal.2d at p. 134.) Thus, as previously explained ( ante, at pp. 568-569), legislative findings purporting to contradict or abrogate express judicial findings of fact evidencing a violation of a constitutional mandate such as article VII are subject to our independent review to determine whether they reasonably support a contrary determination. Legislative findings based on evidence elicited at committee hearings or derived from extensive factual studies logically would be entitled to more weight than findings included in legislation solely to accommodate a litigant's request for relief. Our review of the legislative history underlying the adoption of Chapter 433 fails to indicate that the Legislature conducted any factual studies or evidentiary hearings before adopting that measure. Certainly, Caltrans points to no studies submitted to the Legislature indicating that private contracting would save the state time or money in project development. Indeed, one study plaintiffs submitted to the trial court indicated that the cost of private contracting was substantially greater than the cost of using civil service staff. Caltrans acknowledges that this study showed the cost of one personnel year for a state employee to be $70,000 to $75,000, while the cost of a private consultant was $138,000. Caltrans relies in part on the August 1993 Assembly Committee on Transportation report indicating that the cost-effectiveness of contracting for professional services is a hotly disputed topic and commenting briefly on Caltrans's improved project delivery (resulting, as the trial court found, from Caltrans's deliberate failure to maintain an adequate civil service staff) (Assem. Com. on Transportation, Rep. on Sen. Bill No. 1209 (1993-1994 Reg. Sess.) as amended July 14, 1993, p. 4; see ante, at p. 570) and a letter from the Legislative Analyst to a state senator indicating that figures purporting to show the respective costs of private and public service are not directly comparable. (Legis. Analyst, letter to Sen. Marian Bergeson (July 15, 1993) p. 1.) Caltrans also cites a report of the Senate Transportation Committee referring to various conflicting evaluations and studies on the subject of the cost-effectiveness of private contracting (Sen. Transportation Com., Rep. on Sen. Bill No. 1209 (1993-1994 Reg. Sess.) as amended June 24, 1993) and a Senate Appropriations Committee fiscal summary referring to a study finding no significant difference in cost (Sen. Appropriations Com., Fiscal Summary of Sen. Bill No. 1209 (1993-1994 Reg. Sess.) as amended June 24, 1993). Conspicuously absent from the legislative materials are any studies, reports, or testimony that would contradict the trial court's specific fact findings regarding the absence of affirmative proof of any cost savings or other justification for private contracting. The few studies Caltrans does cite appear largely inconclusive regarding the cost-effectiveness of private contracting. In any event, Caltrans fails to indicate whether these studies were presented to the trial court or the Legislature. Accordingly, they have little relevance here. As Caltrans observes, in an uncodified section of Chapter 433 (ง 13), the Legislature authorized a future study to compare civil service and private contracting costs to help determine the most economical mix of public and private service provision. The results of this study could well assist Caltrans in convincing the trial court to modify its injunction. But until such a study is performed, we have no basis for concluding that Chapter 433's legislative findings have undermined the injunction. We also observe that, by its very nature, the civil service mandate does not readily lend itself to broad legislative exemptions. Rather, courts should usually apply the tests Riley and its progeny devised on a case-by-case basis, evaluating particular contracts rather than entire areas of operation such as engineering or project development. Of course, nothing in this opinion would prevent Caltrans from seeking modification of the 1990 injunction based on a showing that particular contracts are justified because state workers cannot perform the work adequately and competently, or as economically, or because the work calls for the performance of new state functions. In light of our conclusion that Chapter 433 affords no basis for modification of the trial court's injunction, we need not reach plaintiffs' further argument that Chapter 433 is invalid as a violation of separation of power principles. (See Cal. Const., art. III, ง 3; Mandel v. Myers (1981) 29 Cal.3d 531, 547-549 [174 Cal. Rptr. 841, 629 P.2d 935]; Serrano v. Priest (1982) 131 Cal. App.3d 188, 200-201 [182 Cal. Rptr. 387].)