The United States Supreme Court announced Monday it is denying San Diego's request to review a longstanding legal fight over the city's 2012 pension reform measure, Proposition B.
Last August the California Supreme Court ruled the city had violated state labor laws when it placed Prop B on the ballot without first negotiating with unions representing city employees. Prop B was a citizens' initiative that eliminated guaranteed pensions for most newly hired city workers and instead offered them 401(k)-style retirement accounts. It passed with the approval of 66 percent of city voters.
The justices found then-Mayor Jerry Sanders had ignored his responsibility as the city's chief labor negotiator to meet and confer with city employee unions over changes to their terms of employment. While Prop B was not officially sponsored by the city of San Diego, Sanders campaigned heavily for it, at times using city resources. He also admitted in a magazine interview that he avoided labor negotiations so he could get a stricter pension reform on the ballot.
The city sought review from the US Supreme Court, arguing the state high court's ruling ignored Sanders' First Amendment free speech rights. It has long argued Sanders spoke out in favor of Prop B as a private citizen.
State Supreme Court Chief Justice Tani Cantil-Sakauye was unconvinced, and said during oral arguments in May 2018 that Sanders was still 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."
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Carl DeMaio, a former City Council member and one of the chief proponents of Prop B, said he was disappointed but not surprised by US Supreme Court's decision give that it grants review to very few cases
"Prop B Pension Reform is a Citizens Initiative that is protected under the California Constitution and we continue to assert all of the legal remedies afforded to prevent it from being illegally overturned," DeMaio said in a statement Monday morning.
While the state Supreme Court found the city's actions violated state law, it left it up to the state's 4th District Court of Appeal to determine how to rectify that violation. Oral arguments in that case took place March 11, and the panel of three judges has 90 days to issue a decision.
The unions have argued the Court of Appeal should overturn Prop B and validate a 2015 ruling by the Public Employment Relations Board, a quasi-judicial administrative agency that enforces certain labor laws. PERB had ordered the city to incorporate employees hired after Prop B into the city's pension program.
Lawyers for the city and Prop B proponents asked the Court of Appeal for a more lenient remedy to the city's violation, such as a fine. Any decision from the Court of Appeal can again be appealed to the state Supreme Court.
It is unclear how much it would cost the city if it were ordered to create pensions for employees hired since Prop B passed. Much of the cost would depend on whether the city could use the funds accrued in the employees' 401(k) accounts. The city may also be ordered to foot the unions' legal bills, which have been racking up since the measure was circulated in 2011.
