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California Supreme Court Hears Arguments In Prop B Pension Case

San Diego Mayor Jerry Sanders and supporters announce their pension reform me...

Photo by Katie Orr

Above: San Diego Mayor Jerry Sanders and supporters announce their pension reform measure on April 5, 2011.

California Supreme Court Hears Arguments In Prop B Pension Case

GUEST:

Dan Eaton, partner, Seltzer Caplan McMahon Vitek

Transcript

The California Supreme Court on Tuesday heard oral arguments in a case that could overturn San Diego's landmark pension reform measure and put the city on the hook for tens of millions of dollars.

City voters approved Proposition B in June 2012, ending guaranteed pensions for all new city employees except police officers. The pensions were replaced with 401(k)-style retirement accounts.

Unions representing city employees sued the city over the measure, arguing then-Mayor Jerry Sanders was required to meet and confer with them over any changes to employee benefits. They say while Prop B was written by a group of private citizens, Sanders effectively initiated the measure and used city resources to craft and promote it.

The city and Prop B proponents argue Sanders campaigned for the measure only as a private citizen, and that the measure would have gone to the ballot with or without his support.

"It was still a citizens' initiative, and the involvement of someone who inspired or campaigned for or spoke on behalf of a citizens' initiative doesn't change its nature and doesn't change the First Amendment rights of the proponents," said Alena Shamos, the attorney representing Prop B proponents.

Chief Justice Tani Cantil-Sakauye appeared sympathetic to the unions' argument that Sanders was still the city's chief labor negotiator, and thus was required to negotiate with the unions in good faith.

"He doesn't get to pick and choose which parts of his title and responsibilities he gets to disregard," Cantil-Sakauye said. "'I'm mayor, but — blink blink — I'm acting as a private citizen.' It just seems to me that he also has other roles that he failed to acknowledge."

Also at issue in the case is what degree of deference courts should give to a quasi-judicial board that hears public employee labor disputes.

The Public Employment Relations Board, which is the named respondent in the Supreme Court case, ruled in late 2015 that Prop B should be overturned. The board's lawyers argue PERB has expertise in labor law, and thus the 4th District Court of Appeal should have accepted PERB's findings of fact in the case.

The appeals court last year overturned PERB's decision in a "de novo" review of the case, meaning it evaluated the facts with no reference to the prior ruling.

The court has 90 days to publish its opinion in the case. If the justices rule in favor of the unions, the city may be required to spend tens of millions of dollars creating new pensions for the thousands of city employees hired since the passage of Prop B.

The California Supreme Court is set to decide on the legality of Proposition B, San Diego's 2012 voter-approved pension reform measure. Unions representing city employees argue then-Mayor Jerry Sanders violated labor negotiation rules in his support for the measure.

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