Court Opinion

ID: 5655010
Source: CourtListenerOpinion
Date Created: 2022-01-11 23:44:35.592013+00
Date Added: 2024-06-11T08:38:46.007970
License: Public Domain

REGAN, Acting P. J.
—I dissent. Plaintiff asserts its right to bring the instant action for declaratory relief on the basis of allegations in the complaint which plaintiff argues establish it as an “interested organization” under Unemployment Insurance Code section 409.2. That section was enacted by the Legislature in 1975 (Stats. 1975, ch. 978, § 2) and it has neither been amended nor construed by any reported decision of an appellate court to our knowledge.
The cross-reference in section 409.2 of the Unemployment Insurance Code to those provisions of the Code of Civil Procedure having to do with declaratory relief is of utmost significance. Declaratory relief is a well-established equitable procedure recognized by statutes contained in the Code of Civil Procedure for many decades. These provisions now consist of sections 1060 through 1062a of that code. The key section is Code of Civil Procedure section 1060 which expressly recognizes the *159long-standing equitable concept that the form of relief is available only to a person “interested” in specified types of legal actions or cases in which an “actual controversy” exists as to the rights and duties of the respective parties.
In an effort to show it is an “interested” person or organization with respect to Precedent Benefit Decision No. 292 (P-B-292), plaintiff alleged only the following in its complaint:
“5. a. Plaintiff Pacific Legal Foundation (hereinafter PLF) is a nonprofit, tax-exempt, public interest law foundation duly organized and existing under and by virtue of the laws of the State of California. PLF is composed of residents of various cities and counties in the State of California, many of whom are employers of workers covered by state unemployment insurance. As its primary purpose, PLF seeks to provide legal representation for the citizens of California, corporate or individual, and citizens of the United States of America on matters of public interest at all levels of the administrative and judicial process. PLF is primarily involved in, but not limited to, litigation concerning broad public interest issues in the areas of public welfare, land use, and environmental law. Policy for PLF is set by a seventeen-member Board of Trustees composed of concerned citizens who reside throughout the state. Ten of the seventeen-member PLF board are attorneys. The PLF board evaluates the merits of any contemplated legal action and authorizes such legal action only where the foundation’s position has broad support within the general community. The PLF board has authorized this suit.
“b. As an employer, PLF has 32 workers covered by the Unemployment Insurance Code.
“c. PLF, and many of its members, contributors and supporters, as employers of workers covered by the Unemployment Insurance Code, are required by Unemployment Insurance Code § 901, et seq., to contribute to the Unemployment Insurance Fund. As such, PLF and its members, contributors and supporters are interested parties in this proceeding and will suffer great and irreparable injury by this decision of the Board if it is not reversed. The Board’s decision in P-B-292 will subvert the Legislative intent expressed in Unemployment Insurance Code § 100, supra, and increase the number of eligible claimants for unemployment assistance. In these uncertain economic times, such a *160decision has potential for vastly increasing the amount of unemployment assistance which is paid out and thus increasing the employer contributions which would be necessary to support these increased payments.”
The above allegations fall short of the type of “interest” which the courts have traditionally required to be alleged and proved upon which to predicate an action for declaratory relief. The courts have long required that there be shown an “actual controversy” presently exists between the parties. (Stewart v. Stewart (1928) 204 Cal. 546, 557 [269 P. 439].) When the pleading ultimately amounts to a mere conjecture or even a supposition on the plaintiff’s part that a controversy might arise in the future, it is insufficient (Merkley v. Merkley (1939) 12 Cal.2d 543, 547 [86 P.2d 89]; Burke v. City etc. of San Francisco (1968) 258 Cal.App.2d 32, 34 [65 Cal.Rptr. 539].)
We note an analogy between the language and concept of Unemployment Insurance Code section 409.2 and Government Code section 11440. The latter section provides that an “interested party” may use the declaratory relief procedure of the Code of Civil Procedure to obtain a judicial determination of the validity of a regulation adopted by a state agency. This section has been construed by the courts to require that while an “actual controversy” may be implied in certain cases without specific allegation or proof thereof, a plaintiff must be “directly affected” or be in clear peril of financial or other serious loss in the reasonably near future. (Sperry & Hutchinson Co. v. Cal. State Bd. of Pharmacy (1966) 241 Cal.App.2d 229, 233 [50 Cal.Rptr. 489]; Chas. L. Harney, Inc. v. Contractors’ Bd. (1952) 39 Cal.2d 561, 564 [247 P.2d 913].) It has been held, also, that an incorporated trade association whose members are subject to the regulations being attacked, but which is not itself subject to them, is not an “interested person.” To be such, there must be a direct, not “merely consequential,” interest. (Associated Boat Industries v. Marshall (1951) 104 Cal.App.2d 21, 22 [230 P.2d 379].)
The language of Unemployment Insurance Code section 409.2 and Government Code section 11440 is so substantially identical it is logical to assume the Legislature had the same intent in mind in enacting each.1 *161This intent seems obviously to have been in each case simply to extend the benefits of the equitable declaratory relief procedure to cover administrative regulations and decisions of the Unemployment Insurance Appeals Board. Declaratory relief is not available merely because a complaint may involve a matter of rather broad general interest, and a plaintiff does not have “standing” if neither he nor those he represents have suffered or are about to suffer any injury of sufficient magnitude reasonable to assure that all relevant facts and issues will be adequately presented. (See Zetterberg v. State Dept. of Public Health (1974) 43 Cal.App.3d 657, 662 [118 Cal.Rptr. 100].)
PLF alleges, in part, that it is an employer of 32 workers covered by unemployment insurance and that the precedent decision of the board will result in more money being paid out in the future by the Unemployment Insurance Fund into which they pay their premiums. Plaintiff also asserts that some of its members, contributors and supporters (without naming any) are in the same position. On appeal it is contended these allegations made plaintiff foundation an “interested organization.” The connection is too remote, too speculative. It amounts to no more than a conjecture or supposition that injury may occur and a controversy arise in the future. (See Burke v. City etc. of San Francisco, supra, 258 Cal.App.2d at p. 34.)
Plaintiff also contends it has “standing” to sue by means of the complaint it filed, by applying public interest litigation standards. The allegations in the complaint, while probably sufficient to allow plaintiff to apply to itself the appellation of “public interest law firm,” are not sufficient to allege facts showing a general public interest is involved in the lawsuit. There is not, as claimed by plaintiff, any element of procuring the enforcement of a public duty or enforcing the public good and general welfare of the citizens of the state. (Cf. Residents of Beverly Glen, Inc. v. City of Los Angeles (1973) 34 Cal.App.3d 117, 122 [109 Cal.Rptr. 724]; Hollman v. Warren (1948) 32 Cal.2d 351, 356-357 [196 P.2d 562]; California Water & Telephone Co. v. County of Los Angeles (1967) 253 Cal.App.2d 16, 26 [61 Cal.Rptr. 618]; Unemp. Ins. Code, § 100.)
I find no merit in plaintiff’s contention that plaintiff as a contributor to the Unemployment Insurance Fund has standing to bring this suit as a taxpayers’ action. In the first place, the complaint is not formed as a taxpayer’s suit. Moreover, plaintiff’s posture is not that of a taxpayer in *162this action in any event, since it is not seeking to enjoin the illegal expenditure of state tax funds. (Cf. Ahlgren v. Carr (1962) 209 Cal.App.2d 248, 253 [25 Cal.Rptr. 887].) Plaintiff seeks to have declared invalid a decision of the defendant board concerning the interpretation of a section of the Unemployment Insurance Code which has at best a most remote and nebulous connection with any likely increase in expenditure of state funds.
Both the employer and the employee make contributions to the Unemployment Fund. (Unemp. Ins. Code, §§ 976, 984.) Furthermore, each employer has its own reserve account arid contributions are adjusted based upon the rating attributed to that employer and the employees there employed. (See Unemp. Ins. Code, §§ 976.5, 977, 982, 1025, 1026.)
Finally, there are no allegations contained in the complaint that would demonstrate a nexus between the contribution rates of the foundation and its members and the precedent benefit decision here being challenged.
In the absence of a showing of clear abuse of discretion, a trial court’s determination as to whether an action for declaratory relief is proper will not be disturbed on appeal. (Bess v. Park (1955) 132 Cal.App.2d 49, 52 [281 P.2d 556]; Auberry Union School Dist. v. Rafferty (1964) 226 Cal.App.2d 599, 602 [38 Cal.Rptr. 223].) I find no such clear showing in plaintiff’s arguments and agree with the trial court’s conclusion at the end of the hearing on the motions for judgment on the pleadings, at which time the court stated that “the only interest which is shown on behalf of the Plaintiff is simply that of an employer.” The court went on to add that a plaintiff must be affected in some other way than employers generally in order to have standing under section 409.2. If the Legislature had intended to allow any employer (or employee) to seek declaratory relief, it would have so provided, instead of requiring that the person or organization be an “interested” person or organization. Counsel for plaintiff conceded at oral argument that the Legislature had not chosen legislative language which would allow every employer (or employee) to challenge any precedent benefit decision of the board. I have examined the items of the legislative histoiy of section 409.2, reliéd upon by plaintiff, and if these items were given weight as indicia of legislative intent, none leads to the conclusion plaintiff espouses, assuming, arguendo, that the section is ambiguous and is in need of such extrinsic *163aids to the judicial interpretive process. The first item is an analysis of the bill in the 1975 legislative session (Assem. Bill No. 1638) under heading of the office of the Legislative Analyst, and stated, in part, that under existing law a decision by the board could be appealed by the claimant or any party representing him, but under the bill the authority to challenge the board’s decision would be broadened so that persons or organizations “not directly involved with the case may seek judicial review.” This begs the question of what is meant in the bill (now § 409.2). by the phrase “any interested person or organization.” This has been dealt with above.
The letter to the Governor written by the bill’s author, Assemblyman Tom Bane, when the bill had passed the Legislature and was before the Governor for his approval or veto, has only slight, if any, greater significance in signifying legislative intent to a court if confronted with an ambiguous statute than would the report of staff personnel in the Assembly office of research or the office of the Legislative Analyst. (See In re Marriage of Bouquet (1976) 16 Cal.3d 583, 589-590 [128 Cal.Rptr. 427, 546 P.2d 1371]; cf. Campbell v. Board of Dental Examiners (1975) 53 Cal.App.3d 283, 286, fn. 3 [125 Cal.Rptr. 694].) The letter states that the bill provides that “any interested person or organization may bring an action for declaratoiy relief as to the validity of any precedent decision.” It went on to state that “[standing to bring such an action for declaratory relief would be the same as in writs of mandamus challenging administrative regulations. For all practical purposes, benefit decisions are regulations and should be treated accordingly.” This dissent treats and interprets section 409.2 in exactly the manner as envisioned by Assemblyman Bane. It uses existing and long-standing judicial authority applying to declaratory relief actions to review administrative regulations (Gov. Code, § 11440) as precedents. Assemblyman Bane’s letter, were it to be used to demonstrate legislative intent, reinforces my interpretation arrived at by other means, rather than derogates from it.
I note further there are no allegations that as an employer, plaintiff or any of its members has the same or in any way similar types of employees as Thurman Carroll or that plaintiff or its members now or in the future will actually be subject to a controversy such as that involved in the Carroll decision of the board. At oral argument, counsel for plaintiff stated that several of its “members” had complained expressly to PLF about the benefit decision. These “members” are not identified anywhere in the pleadings or in briefing; nor did counsel identify them *164at oral argument when opportunity was afforded. Who are they? What is their “interest,” other than that of an employer?
I would affirm the order and judgment on the basis of lack of standing under Unemployment Insurance Code section 409.2. In so doing, I emphasize that the restriction or limitations of the traditional phrase “interested person or organization” as used by the Legislature and interpreted by this court, based upon precedent, must be interpreted in like manner as to any person or organization acting as, or on behalf of, either an employer or an employee.
Respondent’s petition for a hearing by the Supreme Court was denied December 15, 1977. Bird, C. J., did not participate therein.

 The term “interested party” or person “having an interest” has long been a legislative term of art with established meaning in various statutes providing for intervention or declaratory relief. (See, e.g., Code Civ. Proc., § 387; Prob. Code, §§ 370, 380.) Such a person must have “a direct and not a merely consequential interest . . . .” (Associated Boat Industries v. Marshall, supra, 104 Cal.App.2d at p. 22; see also, 15 Hastings L.J. 275-278; 30 Cal.L.Rev. 478-482.)