Boling v. Public Employment Relations Board

Filed 4/11/17

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

CATHERINE A. BOLING et al., D069626

Petitioners,

v.

PUBLIC EMPLOYMENT RELATIONS

BOARD,

Respondent;

CITY OF SAN DIEGO et al.,

Real Parties in Interest.

CITY OF SAN DIEGO, D069630

Petitioner,

v.

PUBLIC EMPLOYMENT RELATIONS

BOARD,

Respondent;

SAN DIEGO MUNICIPAL

EMPLOYEES ASSOCIATION et al.,

Real Parties in Interest.

Petition for extraordinary relief from a decision of the Public Employment

Relations Board. Decision annulled.

Lounsbery Ferguson Altona & Peak, Kenneth H. Lounsbery, James P. Lough and

Alena Shamos for Petitioners and Real Parties in Interest Catherine A. Boling, T. J. Zane

and Stephen B. Williams in No. D069626 and No. D069630.

Jan I. Goldsmith and Mara Elliott, City Attorneys, Daniel F. Bamberg, Assistant

City Attorney, Walter C. Chung and M. Travis Phelps, Deputy City Attorneys, for

Petitioner and Real Party in Interest City of San Diego in No. D069630 and

No. D069626.

JONES DAY, Gregory G. Katsas, G. Ryan Snyder, Karen P. Hewitt and Brian L.

Hazen for San Diego Taxpayers Education Foundation as Amicus Curiae on behalf of

Petitioner in No. D069630.

Renne Sloan Holtzman Sakai and Arthur A. Hartinger for League of California

Cities as Amicus Curiae on behalf of Petitioner in No. D069630.

Meriem L. Hubbard and Harold E. Johnson for Pacific Legal Foundation, Howard

Jarvis Taxpayers Association and National Tax Limitation Committee as Amici Curiae

on behalf of Petitioner in No. D069630.

J. Felix de la Torre, Wendi L. Ross, Mary Weiss, and Joseph W. Eckhart for

Respondent.

Smith, Steiner, Vanderpool & Wax and Ann M. Smith for Real Party in Interest

San Diego Municipal Employees Association in No. D069626.

2

Smith, Steiner, Vanderpool & Wax and Fern M. Steiner for Real Party in Interest

San Diego City Firefighters Local 145 in No. D069626.

Rothner, Segall and Greenstone, Ellen Greenstone and Connie Hsiao for Real

Party in Interest AFCSME Local 127 in No. D069626.

Law Offices of James J. Cunningham and James J. Cunningham for Real Party in

Interest Deputy City Attorneys Association of San Diego in No. D069626.

In June 2012 the voters of City of San Diego (City) approved a citizen-sponsored

initiative, the "Citizens Pension Reform Initiative" (hereafter, CPRI), which adopted a

charter amendment mandating changes in the pension plan for certain employees of City

of San Diego (City). In the proceedings below, the Public Employment Relations Board

(PERB) determined City was obliged to "meet and confer" pursuant to the provisions of

the Meyers-Milias-Brown Act (MMBA) (Gov. Code,1 § 3500 et seq.) over the CPRI

before placing it on the ballot and further determined that, because City violated this

purported obligation, PERB could order "make whole" remedies that de facto compelled

City to disregard the CPRI.

We conclude, for the reasons stated below, that under relevant California law the

meet-and-confer obligations under the MMBA have no application when a proposed

charter amendment is placed on the ballot by citizen proponents through the initiative

process, but instead apply only to proposed charter amendments placed on the ballot by

the governing body of a charter city. We also conclude that, although it is undisputed

1 All statutory references are to the Government Code unless otherwise specified.

3

that Jerry Sanders (City's Mayor during the relevant period) and others in City's

government provided support to the proponents to develop and campaign for the CPRI,

PERB erred when it applied agency principles to transform the CPRI from a citizen-

sponsored initiative, for which no meet-and-confer obligations exist, into a governing-

body-sponsored ballot proposal within the ambit of People ex rel. Seal Beach Police

Officers Assn. v City of Seal Beach (1984) 36 Cal.3d 591 (Seal Beach). Accordingly, we

hold PERB erred when it concluded City was required to satisfy the concomitant "meet-

and-confer" obligations imposed by Seal Beach for governing-body-sponsored charter

amendment ballot proposals, and therefore PERB erred when it found Sanders and the

San Diego City Council (City Council) committed an unfair labor practice by declining to

meet and confer over the CPRI before placing it on the ballot.

I

OVERVIEW

The San Diego Municipal Employees Association and other unions representing

the prospectively affected employees (Unions) made repeated demands on Sanders and

the City Council for City to meet and confer pursuant to the MMBA over the CPRI

before placing it on the ballot. (San Diego Municipal Employees Assn. v. Superior Court

(2012) 206 Cal.App.4th 1447, 1451-1452 (San Diego Municipal Employees).) However,

there was no dispute the proponents of the CPRI had gathered sufficient signatures to

qualify the CPRI for the ballot, and the City Council declined Unions' meet-and-confer

4

demands and placed it on the ballot. (Id. at pp. 1452-1453.) The citizens of San Diego

ultimately voted to approve the CPRI.

Unions filed unfair practice claims with the Public Employment Relations Board

(PERB), asserting the rejection by Sanders and the City Council of their meet-and-confer

demands constituted an unfair practice under the MMBA. PERB commenced

proceedings against City and ultimately ruled City violated the MMBA by refusing to

meet and confer over the CPRI before placing it on the June 2012 ballot. PERB ordered,

among other remedies, that City in effect refuse to comply with the CPRI. City filed this

petition for extraordinary review challenging PERB's conclusion that, because high level

officials and other individuals within City's government publicly and privately supported

the campaign to adopt the citizen-sponsored charter amendment embodied in the CPRI,

City committed an unfair labor practice under the MMBA by placing the CPRI on the

ballot without complying with the MMBA's meet-and-confer requirements.

In Seal Beach, supra, 36 Cal.3d 591, our high court was required to harmonize the

provisions of the meet-and-confer requirements of the MMBA with the constitutional

grant of power to a "governing body" to place a charter amendment on the ballot that

would impact the terms and conditions of employment for employees of that city. The

Seal Beach court concluded that, before a governing body may place such a charter

amendment on the ballot, it must first comply with the meet-and-confer obligations under

the MMBA. (Seal Beach, at pp. 597-601.) The Seal Beach court cautioned, however,

that the case before it "[did] not involve the question whether the meet-and-confer

5

requirement was intended to apply to charter amendments proposed by initiative." (Id. at

p. 599, fn. 8.)

The present proceeding requires that we first determine the issue left open in Seal

Beach: does the meet-and-confer requirement apply when the charter amendment is

proposed by a citizen-sponsored initiative rather than a governing-body-sponsored ballot

proposal? We conclude the meet-and-confer obligations under the MMBA apply only to

a proposed charter amendment placed on the ballot by the governing body of a charter

city, but has no application when such proposed charter amendment is placed on the

ballot by citizen proponents through the initiative process. With that predicate

determination, we must then decide whether PERB properly concluded City nevertheless

violated its meet-and-confer obligations because the CPRI was not a citizen-sponsored

initiative outside of Seal Beach's holding, but was instead a "City"-sponsored ballot

proposal within the ambit of Seal Beach. Although several people occupying elected and

nonelected positions in City's government did provide support for the CPRI, we conclude

PERB erred when it applied agency principles to transform the CPRI into a governing-

body-sponsored ballot proposal. Because we conclude that, notwithstanding the support

given to the CPRI by Sanders and others, there is no evidence the CPRI was ever

approved by City's governing body (the City Council), we hold PERB erred when it

concluded City was required to satisfy the concomitant "meet-and-confer" obligations

imposed by Seal Beach for governing-body-sponsored charter amendment ballot

proposals.

6

II

FACTUAL AND PROCEDURAL BACKGROUND

A. DeMaio's Pension Reform Proposal

In early November 2010, City Councilmember Carl DeMaio announced his

comprehensive plan to reform the City's finances. His wide-ranging plan to reform the

City's finances included, among its many proposals, a proposal to replace defined benefit

pensions with 401(k)-style plans for newly hired employees.

B. Sanders's Pension Reform Proposal

In late November 2010, Sanders also announced that he would attempt to develop

and place a citizen's initiative on the ballot to eliminate traditional pensions for new hires

at City and to replace them with a 401(k)-style plan for nonsafety new hires. Sanders

believed replacing the old system with the new 401(k)-style plan was necessary to solve

what he viewed to be the unsustainable cost to City of the defined benefit pension for

City employees.

Sanders, after discussions with various members of his staff, decided to pursue his

pension reform proposal as a citizens' initiative, rather than to pursue it by a City

Council-sponsored ballot measure. Sanders chose to pursue his pension reform proposal

as a citizen-sponsored initiative, rather than a City Council-sponsored ballot proposal,

because he did not believe the City Council would put his proposal on the ballot "under

any circumstances," and he also believed pursuing a City Council-sponsored ballot

7

proposal (which would also require negotiating with the unions) could require

unacceptable compromises to his proposal.2

Sanders held a "kick-off" press conference to announce his intent to pursue his

pension reform plans through a private initiative. This event, which was held at City Hall

and at which Sanders was joined by others,3 was covered by the local media and included

media statements informing the public that "San Diego voters will soon be seeing

signature-gatherers for a ballot measure that would end guaranteed pensions for new

[C]ity employees."4 Sanders's office also issued a news release—styled as a "Mayor

Jerry Sanders Fact Sheet"—to announce his decision. Faulconer disseminated Sanders's

press release by an e-mail stating Sanders and Faulconer "would craft a groundbreaking

[pension] reform ballot measure and lead the signature-gathering effort to place the

measure before voters," and Sanders sent a similar e-mail announcing he was partnering

2 Sanders, in a tape-recorded interview with a local magazine, explained he pursued

a citizen-sponsored initiative rather than other avenues to achieve his pension reform

objectives because: "[W]hen you go out and signature gather and it costs a tremendous

amount of money, it takes a tremendous amount of time and effort . . . . But you do that

so that you get the ballot initiative on that you actually want. [A]nd that's what we did.

Otherwise, we'd have gone through the meet and confer and you don't know what's going

to go on at that point . . . ."

3 Also in attendance were City Attorney Jan Goldsmith, City Councilmember Kevin

Faulconer, and City's Chief Operating Officer Jay Goldstone).

4 NBC San Diego news coverage of Sanders's press conference included a

photograph of Sanders standing in front of the City seal to make his initiative

announcement.

8

with Faulconer to "craft language and gather signatures" for a ballot initiative to reform

public pensions.

Over the ensuing months, Sanders continued developing and publicizing his

pension reform proposal, and in early January 2011 a committee was formed (San

Diegans for Pension Reform (SDPR)) to raise money to support his proposed initiative.

At his January 2011 State of the City address,5 Sanders vowed to "complete our financial

reforms and eliminate our structural budget deficit." He stated he was "proposing a bold

step" of "creating a 401(k)-style plan for future employees . . . [to] contain pension costs

and restore sanity to a situation confronting every big city" and that, "acting in the public

interest, but as private citizens," Sanders announced that he, Faulconer, and the San

Diego City Attorney (City Attorney) "will soon bring to voters an initiative to enact a

401(k)-style plan." That same day, Sanders's office issued a press release publicizing his

vow "to push forward his ballot initiative" for pension reform.6

Sanders believed he had made it clear to the public that he undertook his efforts as

a private citizen even though he was identified as "Mayor" when speaking in public about

his proposal.

5 Article XV, section 265(c) of the City Charter requires the address as a message

from the Mayor to the City Council that includes "a statement of the conditions and

affairs of the City" and "recommendations on such matters as he or she may deem

expedient and proper." Members of Sanders's staff helped write the speech.

6 After his speech, Sanders continued his publicity efforts for his proposal, and he

was aided in those efforts by individuals who were also members of his staff.

9

C. DeMaio's Competing Pension Reform Initiative

The plan announced by DeMaio in early November 2010 for pension reform

differed in some respects from Sanders's proposal. For example, DeMaio's proposed plan

for a 401(k)-style plan for new hires did not exempt police, firefighters and lifeguards.

DeMaio's proposed plan also included a "cap" on pensionable pay.7 Two local

organizations, the Lincoln Club and the San Diego County Taxpayers Association

(SDCTA), supported DeMaio's competing plan as a plan that was "tougher" than

Sanders's proposal.

D. The CPRI

In the aftermath of Sanders's January 2011 State of the City address, people in the

business and development community informed Sanders they believed two competing

initiative proposals—the DeMaio proposal and the Sanders proposal—would be

7 By mid-March 2011, SDPR (the committee formed to support Sanders's proposed

plan) hired an attorney to provide advice related to Sanders's proposed plan, and the

attorney had opined the "cap" on pensionable pay as proposed by DeMaio's plan would

make such a plan more vulnerable to legal challenges. SDPR also independently hired

Buck Consultants, then serving as City's actuary for City's existing pension plan (and

therefore with access to the data on City's pension system database), to provide a fiscal

analysis of the impacts of 401(k) plans for new employees. Apparently, during the

transition period to a 401(k)-style plan for new employees, there would be an immediate

shorter term cost to City (because the change in the actuarial method used in doing the

calculation would increase City's payments into the pension plan in the first three or four

years), and a proposal for a "hard cap" on total payroll expenses could have mitigated the

short-term impacts on City from the pension reform proposal. At his March 24, 2011,

press conference, Sanders (along with Faulconer and the co-chairman for SDPR)

reiterated their intent to move forward as private citizens with their pension reform

proposal, and stated it would include caps and restrictions (including a five-year cap on

City's payroll expenses) to produce greater savings for City.

10

confusing and there would be inadequate money to fund two competing citizen

initiatives. Shortly after a March 24, 2011, press conference at which Sanders presented

his refined proposal, people within either the Lincoln Club or SDCTA told Sanders they

were "moving forward" with DeMaio's plan because it had sufficient money and was

going to go onto the ballot, and that Sanders could either join them or go off on his own.

This apparently triggered a series of meetings between supporters of the competing

proposals,8 and they reached an accord on the parameters of a single initiative.

The final initiative proposal, which ultimately became the CPRI, melded elements

of both Sanders's and DeMaio's proposals: newly hired police would still continue with a

defined benefit pension plan for newly-hired police officers, but newly-hired firefighters

would be placed into the 401(k)-style plan. The pensionable pay freeze would be subject

to the meet-and-confer process and could be overridden by a two-thirds majority of the

City Council, but there would be no cap on total payroll. Sanders called the negotiations

"difficult," and testified he did not like every part of the new proposal, but he nonetheless

supported it because he believed it was "important for the City in the long run."

A law firm (Lounsbery, Ferguson, Altona & Peak (hereafter Lounsbery)) was

hired by SDCTA to draft the language of the CPRI. SDCTA gave Lounsbery the

DeMaio draft of the initiative as the starting point for Lounsbery's drafting of the final

8 Among those who attended one or more of the meetings were Sanders, Goldstone

and Dubick (Sanders's chief of staff).

11

language for the initiative.9 Lounsbery made relatively few revisions to it to finalize the

language that became the CPRI. Lounsbery was paid by SDCTA for its services.10

On April 4, 2011, the City Clerk received a notice of intent to circulate a petition

seeking to place the CPRI on the ballot, seeking to amend City's Charter pursuant to

section 3 of article XI of the California Constitution. The ballot proponents were

Catherine A. Boling (Boling), T.J. Zane (Zane), and Stephen Williams (Williams)

(collectively, Proponents).11

To qualify the CPRI for the ballot, the Proponents needed to obtain verified

signatures from at least 15 percent (94,346) of the City's registered voters. On September

30, 2011, Zane delivered to the City Clerk a petition containing over 145,000 signatures,

and the City Clerk forwarded the petition to the San Diego County Registrar of Voters

(SDROV) to officially verify the signatures. The SDROV determined the initiative

9 Goldstone testified SDCTA sought his feedback on its proposed language, and he

reviewed and responded to two or three drafts in the evening or weekends at his home.

Dubick and Goldsmith also reviewed and provided feedback on the proposed language.

10 Lounsbery filed a quarterly disclosure form indicating San Diego Taxpayers

Association paid $18,000 to Lounsbery for its services in connection with its work on the

CPRI for the first quarter of 2011. Among the people listed as being "lobbied" in

connection with Lounsbery's work on the CPRI were Sanders, Goldstone, Goldsmith,

Dubick and Faulconer.

11 Williams and Zane were leaders in the Lincoln Club, and the Lincoln Club (along

with SDPR, the committee formed to raise money in support of Sanders's proposed

initiative) was a major contributor to the committee formed to promote the campaign for

the CPRI. Although Sanders would have preferred that SDPR's head (Shephard) run the

campaign, Sanders was persuaded by a vice chairman of the Lincoln Club that Zane was

perfectly capable of running the ballot initiative campaign from the Lincoln Club.

12

petition contained sufficient valid signatures and, accordingly, on November 8, 2011, the

SDROV issued a Certification that the CPRI petition had received a "SUFFICIENT"

number of valid signatures requiring it to be presented to the voters as a citizens'

initiative. The City Clerk submitted the SDROV's Certification to the City Council on

December 5, 2011, and that same day the City Council passed Resolution R-307155, a

resolution of intention to place the CPRI on the June 5, 2012, Presidential primary

election ballot, as required by law.

E. Sanders Campaigns for the CPRI

The day after the proponents filed their notice of intent to circulate, Sanders,

DeMaio, Goldsmith, Faulconer, Boling, and Zane held a press conference on the City

Concourse at which they announced the filing of the CPRI petition.12 A news media

outlet reported that proponents of the dueling ballot measures to curtail San Diego City

pensions had reached a compromise to combine forces behind a single initiative for the

June ballot. Sanders thereafter supported the campaign to gather signatures and promote

the CPRI. He touted its importance by providing interviews and quotes to the media and

by discussing it at his speaking appearances13. Additionally, campaign disclosure

12 Sanders testified he appeared as a private citizen, and assumed the same was true

for Goldsmith, although there is no evidence whether they communicated this fact to the

press or the public at the press conference.!(XIII:3427-3428)!

13 For example, he included the CPRI in the "bullet points" prepared for his speaking

engagements before various groups. He also approved issuing a "message from Mayor

Jerry Sanders" for circulation to members of the San Diego Regional Chamber of

Commerce that solicited financial and other support for the signature gathering effort,

although he did not know whether the language of that message was drafted by the

13

statements indicated SDPR (the committee formed to promote Sanders's original

initiative proposal) contributed $89,000 in cash and nonmonetary support to the

committee supporting the CPRI from January 1, 2011, through June 1, 2011.

F. The Meet-and-Confer Demands

On July 15, 2011, the San Diego Municipal Employees Association (MEA) wrote

to Sanders asserting City had the obligation under the MMBA to meet and confer over

the CPRI. When Sanders did not respond, MEA wrote a second letter demanding City

satisfy its meet-and-confer obligations concerning the CPRI. City Attorney Goldsmith

responded by stating, among other things, the City Council was required (under the

California Constitution and state elections law) to place the CPRI without modification

on the ballot as long as the proponents submitted the requisite signatures and otherwise

met the procedural requirements for a citizen initiative to amend the Charter. Goldsmith

explained that, "[a]ssuming the proponents of the [CPRI] obtain the requisite number of

signatures on their petition and meet all other legal requirements, there will be no

determination of policy or course of action by the City Council, within the meaning of the

MMBA, triggering a duty to meet and confer in the act of placing the citizen initiative on

the ballot."

MEA, in its September 9, 2011, response to Goldsmith's explanation, asserted City

was obligated to meet and confer because Sanders was acting as the Mayor to promote

campaign or by his staff. Members of Sanders's staff facilitated his promoting of the

CPRI by, for example, responding to requests from the media for quotes.

14

the CPRI and hence "has clearly made a determination of policy for this City related to

mandatory subjects of bargaining . . . ." MEA asserted Sanders was "using the pretense

that [the CPRI] is a 'citizens' initiative' when it is, in fact, this City's initiative" as a

deliberate tactic to "dodge the City's obligations under the MMBA." The City Attorney's

office reiterated City had no meet-and-confer obligations "at this point in the process"

because "there is no legal basis upon which the City Council can modify the [CPRI], if it

qualifies for the ballot," but instead the City Council "must comply with California

Elections Code . . . section 9255" and place the CPRI on the ballot if it meets the

signature and other procedural requirements set forth in the Elections Code.

Accordingly, City declined MEA's demand to meet and confer over the CPRI.14

G. The Initial Proceedings and San Diego Municipal Employees

MEA filed its unfair practice charge (UPC) on January 20, 2012, asserting City

refused to meet and confer over the CPRI because "City claims that it is a 'citizen's

initiative' not 'City's initiative,' " and MEA alleged this refusal violated the MMBA

because the CPRI "is merely a sham device which City's 'Strong Mayor' has used for the

express purpose of avoiding City's MMBA obligations to meet and confer." However, on

January 30, 2012, the City Council, after recognizing the petitions for the CPRI contained

the requisite number of signatures, enacted an ordinance placing the CPRI on the June

2012 ballot.

14 Subsequent demands by MEA (as well as other employee unions) to meet and

confer were rejected by City for similar reasons.

15

On February 10, 2012, PERB issued a complaint against City, alleging City's

failure to meet and confer violated sections 3505 and 3506, and was an unfair practice

within the meaning of section 3509, subdivision (b) and California Code of Regulations,

title 8, section 32603, subdivisions (a) through (c).15 PERB also ordered an expedited

administrative hearing and appointed an administrative law judge (ALJ) to hold an

evidentiary hearing on the complaints. (San Diego Municipal Employees, supra, 206

Cal.App.4th at p. 1453.)

PERB also filed a superior court action seeking, among other relief, an order

temporarily enjoining presentation of the CPRI to the voters on the June 2012 ballot, but

the trial court rejected PERB's motion for a preliminary injunction. (San Diego

Municipal Employees, supra, 206 Cal.App.4th at pp. 1453-1454.) After the ALJ

scheduled an administrative hearing for early April 2012 on the complaints, City moved

in the superior court action for an order staying the administrative hearing and quashing

the subpoenas issued by the ALJ. The trial court granted City's motion to stay the

administrative proceedings, and MEA pursued writ relief. (Id. at pp. 1454-1455.) In San

Diego Municipal Employees, this court concluded the stay was improper because "[a]s

the expert administrative agency established by the Legislature to administer collective

bargaining for covered governmental employees, PERB has exclusive initial jurisdiction

over conduct that arguably violates the MMBA" (id. at p. 1458), and PERB's "initial

15 Other unions also filed UPC's and PERB issued complaints on those claims. All

of the claims and complaints were ultimately consolidated for hearing.

16

exclusive jurisdiction extends to activities ' "arguably . . . prohibited" by public

employment labor law . . . .' " (Id. at p. 1460, quoting City of San Jose v. Operating

Engineers Local Union No. 3 (2010) 49 Cal.4th 597, 606, italics added by San Diego

Municipal Employees).) This court noted that, had City directly placed the CPRI on the

ballot without satisfying the meet-and-confer procedures, it would have engaged in

conduct prohibited by the MMBA, and we ultimately concluded that because "MEA's

UPC alleges (and provides some evidence to support the allegations) that the CPRI

(while nominally a citizen initiative) was actually placed on the ballot by City using straw

men to avoid its MMBA obligations, the UPC does allege City engaged in activity

arguably prohibited by public employment labor law, giving rise to PERB's initial

exclusive jurisdiction." (Id. at p. 1460.) This court ultimately concluded it was error to

stay PERB's exclusive initial jurisdiction over the UPC claims, and vacated the stay. (Id.

at pp. 1465-1466.)

H. PERB Proceedings and Determination

The ALJ Proposed Decision

The ALJ held an administrative hearing and, after taking evidence, issued a

proposed decision. The proposed decision found Sanders chose to pursue a citizens'

initiative measure, rather than invoke the City Council's authority to place his plan on the

ballot as a City Council-sponsored ballot proposal, because he doubted the City Council's

willingness to agree with him and because he sought to avoid concessions to the unions.

The ALJ found the CPRI, which embodied a compromise between Sanders's proposal

17

and the proposal championed by DeMaio, was then carried forward as a citizens'

initiative and was adopted by the electorate. The ALJ found that, because Sanders

occupied the office of Mayor in a city that uses the "strong mayor" form of governance,

and in that role has certain responsibilities when conducting collective bargaining with

represented employee organizations on behalf of City (including the responsibility to

develop City's initial bargaining proposals, to map out a strategy for negotiations, and to

brief the City Council on the proposals and strategies and to obtain the City Council's

agreement to proceed), Sanders "was not legally privileged to pursue implementation of

[pension reform] as a private citizen." The ALJ concluded that because Sanders, acting

"under the color of his elected office" and with the support of two City Councilmembers

and the City Attorney,16 launched and pursued the pension reform initiative campaign,

Sanders made "a policy determination that [City] propose[d] for adoption by the

electorate" on a negotiable matter but denied the unions "an opportunity to meet and

16 The ALJ's decision also cited evidence that "[q]uantifiable time and resources

derived from the City . . . were devoted to the Mayor's promotion of his initiative,

notwithstanding the views of some or all of the City's witnesses that their activities were

on personal time." However, the ALJ appeared to find that, even if all of the support

work done by individual members of Sanders's staff had been "done on non-work time,

their defense that these activities were done for private purposes is no stronger than the

Mayor's . . . ." We note this finding because the PERB decision, as well as PERB's

arguments in this writ proceeding, devotes substantial analysis to explaining that City-

owned resources (as well as time spent by individuals who were members of Sanders's

staff) were employed to support the CPRI. Although there is some evidentiary support

for these factual findings, neither PERB's decision nor PERB's briefs in this proceeding

articulates the legal relevance of these findings on the central issue raised in this

proceeding—whether Sanders's acts in supporting the CPRI were as agent for the City

Council—and we therefore limit our remaining discussion of those facts.

18

confer over his policy determination in the form of [the CPRI]," in violation of the meet-

and-confer obligations under Seal Beach. The ALJ further concluded that, because of

Sanders's "status as a statutorily defined agent of the public agency and common law

principles of agency, the same obligation to meet and confer applie[d] to the City because

it has ratified the policy decision resulting in the unilateral change."

The PERB Decision

After PERB considered supplemental briefing concerning the ALJ's proposed

decision from City, Unions and the ballot proponents, PERB issued the decision

challenged in this writ proceeding that largely affirmed the ALJ's decision.17

Specifically, PERB rejected City's exceptions to the ALJ's conclusions that City was

charged with Sanders's conduct under principles of statutory agency, common law

principles of agency based on actual and apparent authority, and common law ratification

principles.18 Instead, PERB adopted the ALJ's findings that: (1) "under the City's Strong

Mayor form of governance and common law principles of agency, Sanders was a

17 PERB modified the remedies ordered by the ALJ's proposed decision (see fn. 20,

post) but affirmed the core determination that the refusal to meet and confer over the

CPRI before placing it on the ballot violated the MMBA.

18 Curiously, although PERB concluded common law agency principles permitted

PERB to charge City with Sanders's conduct in promoting and campaigning for the

CPRI, PERB also concluded the evidence showed the Proponents of the CPRI (who paid

to have the CPRI drafted and who ran the signature effort and campaign for passage of

the CPRI) were not Sanders's agents because they undertook their actions outside of

Sanders's control. PERB nevertheless concluded common law principles of ratification

and apparent authority applied "so as not to excuse the City's failure to meet and confer

based on the actions of private citizens involved in the passage of [the CPRI]."

19

statutory agent of the City with actual authority to speak for and bind the City with

respect to initial proposals in collective bargaining with the Unions; (2) under common

law principles of agency, [Sanders] acted with actual and apparent authority when

publicly announcing and supporting a ballot measure to alter employee pension benefits;

and (3) the City Council had knowledge of [Sanders's conduct], by its action and

inaction, and, by accepting the benefits of Proposition B, thereby ratified his conduct."

PERB's decision also concluded that, because City (through Sanders as its agent) decided

to place the CPRI on the ballot while acquiescing in Sanders's rejection of the unions'

meet-and-confer demands, City violated the MMBA.19

PERB modified the remedy ordered in the ALJ's proposed decision insofar as the

proposed decision ordered City to vacate the results of the election adopting the CPRI.20

19 Specifically, PERB found the City Council "was on notice that, even if pursued as

a private citizens' initiative, [Sanders's] public support for an initiative to alter employee

pension benefits would be attributed to the City for purposes of MMBA. . . . [¶] . . . [¶]

After it became aware of the Unions' requests for bargaining, the City Council, like

[Sanders], relied on the advice of Goldsmith that no meet-and-confer obligation arose

because [the CPRI] was a purely 'private' citizens' initiative. The City Council failed to

disavow the conduct of its bargaining representative and may therefore be held

responsible for [Sanders's] conduct. [Citation.] The City Council also accepted the

benefits of [the CPRI] with prior knowledge of [Sanders's] conduct . . . . [¶] We agree

with the ALJ's findings that, with knowledge of his conduct and, in large measure, notice

of the potential legal consequences, the City Council acquiesced to [Sanders's] actions,

including his repeated rejection of the Unions' requests for bargaining, and that, by

accepting the considerable financial benefits resulting from passage and implementation

of [the CPRI], the City Council thereby ratified [Sanders's] conduct."

20 The ALJ's Proposed Decision required, among other affirmative actions by City,

that City "[r]escind the provisions of [the CPRI] adopted by the City and return to the

status quo that existed at the time the City refused to meet and confer . . . ." The PERB

decision declined to adopt that aspect of the remedy posited in the ALJ's proposed

20

However, PERB's remedy, invoking its "make-whole" and "restoration" powers for

remedying violations of the MMBA, ordered (among other things) that City "pay

employees for all lost compensation, including but not limited to the value of lost pension

benefits, resulting from the enactment of [the CPRI], offset by the value of new benefits

required from the City under [the CPRI]."

Writ Proceedings Challenging PERB Decision

City timely filed this writ petition challenging PERB's decision (§ 3509.5), and

this court issued its writ of review. In City's writ proceeding, City named Proponents as

additional real parties in interest and Proponents have filed briefs in that proceeding.

Proponents also filed a separate writ petition challenging PERB's decision, and this court

issued a writ of review. We subsequently consolidated the two writ proceedings for

consideration and disposition.

In City's writ proceeding, PERB (joined by Unions) has moved to dismiss

Proponents as real parties in interest, arguing Proponents lack standing to participate as

real parties because they were not (and were indeed barred by PERB regulations from

being) parties to the underlying PERB proceeding. PERB has separately moved to

dismiss Proponents' writ proceeding on the same ground. We conclude official

proponents of a ballot initiative have a sufficiently direct interest in the result of the

proceeding (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1178) to join as real

parties in interest in an action, either by intervention or because they are named by other

decision because PERB expressed doubts it had the power to rescind an initiative adopted

by the voters.

21

parties as real parties in interest, which is directed at the evisceration of the ballot

measure for which they were the official proponents. (See Perry v. Brown (2011) 52

Cal.4th 1116, 1125; see also Amwest Surety Ins. Co. v. Wilson (1995) 11 Cal.4th 1243,

1250.) Accordingly, we deny PERB's motion to dismiss Proponents as real parties in

interest from City's writ proceeding. Additionally, in light of our conclusion that PERB's

decision must be annulled because City was not obligated to meet and confer prior to

placing the CPRI on the ballot, PERB's motion to dismiss Proponents' writ proceeding

(and the additional arguments raised in Proponents' writ proceeding) are moot and we

need not address them.

II

STANDARDS OF REVIEW

The standards applicable to our review of a PERB decision are governed by

differing degrees of deference. First, insofar as PERB's decision rests on its resolution of

disputed factual questions, we apply the most deferential standard of review. Under this

standard, PERB's factual findings are conclusive as long as there is any substantial

evidence in the record to support its factual findings. (Trustees of Cal. State University v.

Public Employment Relations Bd. (1992) 6 Cal.App.4th 1107, 1123; see, e.g., Regents of

University of California v. Public Employment Relations Bd. (1986) 41 Cal.3d 601, 618-

623 [affirming PERB determination that students were employees under Higher

Education Employer-Employee Relations Act because substantial evidence supported

22

conclusion students' educational objectives were subordinate to the services students

performed as housestaff].)

The deference to be accorded PERB's resolution of questions of law, and PERB's

application of that law to the facts found by PERB, presents a more complicated question,

because "balancing the necessary respect for an agency's knowledge, expertise, and

constitutional office with the courts' role as interpreter of laws can be a delicate

matter . . . ." (Gonzales v. Oregon (2006) 546 U.S. 243, 255.) PERB asserts that we

must follow its determinations of law unless clearly erroneous. Specifically, PERB

argues that because it has been invested by the legislative scheme with the "specialized

and focused task" of protecting " 'both employees and the state employer from violations

of the organizational and collective bargaining rights guaranteed by [law]' " (Banning

Teachers Assn. v. Public Employment Relations Bd. (1988) 44 Cal.3d 799, 804), PERB is

" 'one of those agencies presumably equipped or informed by experience to deal with a

specialized field of knowledge, whose findings within that field carry the authority of an

expertness which courts do not possess and therefore must respect.' " (Ibid., quoting

Universal Camera Corp. v. National Labor Relations Bd. (1951) 340 U.S. 474, 488.)

Accordingly, PERB argues, "[T]he relationship of a reviewing court to an agency such as

PERB, whose primary responsibility is to determine the scope of the statutory duty to

bargain and resolve charges of unfair refusal to bargain, is generally one of deference"

(Ibid., citing Oakland Unified School Dist. v. Public Employment Relations Bd. (1981)

23

120 Cal.App.3d 1007, 1012), and PERB's interpretation will generally be followed unless

it is clearly erroneous.

However, in Yamaha Corp. of America v. State Bd. of Equalization (1998) 19

Cal.4th 1 (Yamaha), our Supreme Court explained, " 'The standard for judicial review of

agency interpretation of law is the independent judgment of the court, giving deference to

the determination of the agency appropriate to the circumstances of the agency action.' "

(Id. at p. 8.) Yamaha's conceptual framework noted that courts must distinguish between

two classes of interpretive actions by the administrative body—those that are "quasi-

legislative" in nature and those that represent interpretations of the applicable law—and

cautions that "because of their differing legal sources, [each] command significantly

different degrees of deference by the courts." (Id. at p. 10.) When examining the former

type of action, an agency interpretation "represents an authentic form of substantive

lawmaking: Within its jurisdiction, the agency has been delegated the Legislature's

lawmaking power. [Citations.] Because agencies granted such substantive rulemaking

power are truly 'making law,' their quasi-legislative rules have the dignity of statutes.

When a court assesses the validity of such rules, the scope of its review is narrow. If

satisfied that the rule in question lay within the lawmaking authority delegated by the

Legislature, and that it is reasonably necessary to implement the purpose of the statute,

judicial review is at an end." (Id. at pp. 10-11.)

However, "[t]he quasi-legislative standard of review 'is inapplicable when the

agency is not exercising a discretionary rule-making power, but merely construing a

24

controlling statute. The appropriate mode of review in such a case is one in which the

judiciary, although taking ultimate responsibility for the construction of the statute,

accords great weight and respect to the administrative construction.' [(Quoting

International Business Machines v. State Bd. of Equalization (1980) 26 Cal.3d 923, 931,

fn. 7.)]" (Yamaha, supra, 19 Cal.4th at p. 12, italics added by Yamaha.) Yamaha

recognized that, unlike quasi-legislative rule making by the agency, an agency's

interpretation of the law does not implicate the exercise of a delegated lawmaking power

but "instead . . . represents the agency's view of the statute's legal meaning and effect,

questions lying within the constitutional domain of the courts." (Id. at p. 11.) Yamaha

recognized that an agency may often be interpreting the legal principles within its

administrative jurisdiction and, as such "may possess special familiarity with satellite

legal and regulatory issues. It is this 'expertise,' expressed as an interpretation . . . , that is

the source of the presumptive value of the agency's views. An important corollary of

agency interpretations, however, is their diminished power to bind. Because an

interpretation is an agency's legal opinion, however 'expert,' rather than the exercise of a

delegated legislative power to make law, it commands a commensurably lesser degree of

judicial deference." (Ibid.)

We construe Yamaha as recognizing that, in our tripartite system of government, it

is the judiciary—not the legislative or executive branches—that is charged with the final

responsibility to determine questions of law (Yamaha, supra, 19 Cal.4th at p. 11 & fn. 4),

and "[w]hether judicial deference to an agency's interpretation is appropriate and, if so, its

25

extent—the 'weight' it should be given—is thus fundamentally situational." (Id. at p. 12,

italics added.) Thus, while some deference to an agency's resolution of questions of law

may be warranted when the agency possesses a special expertise with the legal and

regulatory milieu surrounding the disputed question (see New Cingular Wireless PCS,

LLC v. Public Utilities Commission (2016) 246 Cal.App.4th 784, 809-810), the judiciary

accords no deference to agency determinations on legal questions falling outside the

parameters of the agency's peculiar expertise.21 (See, e.g., Overstreet ex rel. NLRB v.

United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506 (9th

Cir. 2005) 409 F.3d 1199, 1208-1209 [no deference accorded to the NLRB's

interpretation of NLRA when judged against backdrop of competing constitutional

issues]; accord, California State Teachers' Retirement System v. County of Los Angeles

(2013) 216 Cal.App.4th 41, 55 [under Yamaha "the degree of deference accorded should

21 Indeed, although a court may accept statutory constructions made by PERB that

are "within PERB's legislatively designated field of expertise . . . unless it is clearly

erroneous" (San Mateo City School Dist. v. Public Employment Relations Bd. (1983) 33

Cal.3d 850, 854-856 [because PERB is empowered to determine in disputed cases

whether a particular item is within or without the scope of representation requiring

bargaining, interpretation of a statutory provision defining scope of representation falls

squarely within PERB's legislatively designated field of expertise and will not be

reversed unless clearly erroneous]), the courts in other contexts have declined to accord

any deference when the PERB decision does not adequately evaluate and apply common

law principles. (See, e.g., Los Angeles Unified School Dist. v. Public Employment

Relations Bd. (1983) 191 Cal.App.3d 551, 556-557 [PERB determined two local public

employee unions, both affiliated with same international, were not "same employee

organization" within the meaning of section 3545, subdivision (b)(2), because actual

conduct showed international did not exercise dominion and control over local unions;

court reversed PERB ruling and concluded two local unions would qualify as the same

employee organization within the meaning of the statute as long as international actually

or potentially exercised the requisite dominion and control].)

26

be dependent in large part upon whether the agency has a ' "comparative interpretative

advantage over the courts" ' and on whether it has probably arrived at the correct

interpretation"]; Azusa Land Partners v. Department of Indus. Relations (2010) 191

Cal.App.4th 1, 14 [Where dispositive facts are undisputed and purely legal issues remain

requiring interpretation of a statute an administrative agency is responsible for enforcing,

courts exercise independent judgment, and "agency's interpretation is ' "one of several

interpretive tools that may be helpful. In the end, however, '[the court] must . . .

independently judge the text of the statute.' " ' "].)

IV

ANALYSIS

A. Overview of MMBA

The MMBA codifies California's recognition of the right of public employees to

collectively bargain with their government employers, and reflects a strong policy in

California favoring peaceful resolution of employment disputes by negotiations. (§ 3500;

Fire Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608, 622.) In furtherance of that

goal, section 3504.5 of the MMBA requires that reasonable written notice be given to

organizations such as the MEA of any action "proposed to be adopted by the governing

body" that directly relates to matters within the scope of representation.22 It further

22 Section 3504.5, subdivision (a) provides that, "Except in cases of emergency as

provided in this section, the governing body of a public agency . . . shall give reasonable

written notice to each recognized employee organization affected of any ordinance, rule,

resolution, or regulation directly relating to matters within the scope of representation

27

requires such governing body or its designated representative, "prior to arriving at a

determination of policy or course of action," to "meet-and-confer in good faith" with

representatives of the union concerning negotiable subjects.23

The duty to meet and confer, which "has been construed as a duty to bargain . . .

[citation] [and] . . . requires the public agency to refrain from making unilateral changes

in employees' wages and working conditions until the employer and employee

association have bargained to impasse" (Santa Clara County Counsel Attys. Assn. v.

Woodside (1994) 7 Cal.4th 525, 537), thus places on the employer the duties (1) to give

reasonable written notice (to each recognized employee organization affected) of an

ordinance directly relating to matters within the scope of representation "proposed to be

adopted by the governing body" and provide such organization the opportunity to meet

with the governing body, and (2) to meet and confer in good faith (and consider fully the

presentations by the organization) prior to arriving at any determination on the governing

body's course of action. (§§ 3504.5, subd. (a) & 3505.) Accordingly, absent emergency

circumstances or other exceptions, a governing body that is subject to the MMBA may

not adopt a legislative policy that unilaterally changes its employees' wages and working

proposed to be adopted by the governing body . . . and shall give the recognized

employee organization the opportunity to meet with the governing body . . . ."

23 Section 3505 provides: "The governing body of a public agency . . . or other

representatives as may be properly designated by law or by such governing body, shall

meet and confer in good faith regarding wages, hours, and other terms and conditions of

employment with representatives of such recognized employee organizations . . . , and

shall consider fully such presentations as are made by the employee organization on

behalf of its members prior to arriving at a determination of policy or course of action."

28

conditions without first complying with its meet-and-confer obligations imposed by the

MMBA.

In Seal Beach, the court was required to harmonize the provisions of the "meet-

and-confer" requirements of the MMBA with the constitutional grant of power to a city

council, as governing body for a charter city, to place a charter amendment on the ballot

that would (if adopted) impact the terms and conditions of employment for employees of

that city. The Seal Beach court concluded that, before such a governing body may place

this type of charter amendment on the ballot, it must first comply with the meet-and-

confer obligations under the MMBA. (Seal Beach, supra, 36 Cal.3d at pp. 597-601.)

The Seal Beach court cautioned, however, that the case before it "[did] not involve the

question whether the meet-and-confer requirement was intended to apply to charter

amendments proposed by initiative." (Id. at p. 599, fn. 8.)

B. Seal Beach's Meet-and-Confer Obligations Do Not Apply to Citizen Initiatives

We first address and resolve the issue expressly left open in Seal Beach: whether

the meet-and-confer requirements of the MMBA, which Seal Beach concluded did apply

to a city council's determination to place a charter amendment on the ballot, apply with

equal force before the governing body of a charter city may comply with its statutory

obligation to place on the ballot a duly qualified citizen's initiative proposing the same

type of charter amendment.24

24 We believe it is both necessary and appropriate to resolve this threshold issue. It

is necessary because if we were to conclude the same meet-and-confer obligations are

compelled, regardless of whether persons associated with city government are involved

29

Citizens Initiatives Do Not Trigger MMBA Procedural Requirements

The charter amendment provisions contained in article XI, section 3, subdivision

(b), of the California Constitution provide only two avenues by which a charter

amendment may be proposed: it "may be proposed by initiative or by the governing

body." When an amendment is proposed by initiative, and at least 15 percent of the

registered voters of the charter city sign the initiative petition, the governing body "shall

. . . [submit the initiative] to the voters" at an election not less than 88 days after the date

of the order of election. (Elec. Code, 9255, subd. (c), italics added.) The "governing

body" has no discretion to do anything other than to place a properly qualified initiative

on the ballot.25 (Farley v. Healey (1967) 67 Cal.2d 325, 327; Save Stanislaus Area

Farm Economy v. Board of Supervisors (1993) 13 Cal.App.4th 141, 148 ["local

governments have the purely ministerial duty to place duly certified initiatives on the

in drafting and/or campaigning for a citizen-sponsored initiative, we would have to affirm

PERB's principal determination that City violated the MMBA by refusing unions'

demands to meet and confer before placing the CPRI on the ballot, and all of PERB's

subsidiary conclusions regarding Sanders's actual or ostensible agency relationship to

City (even if legally erroneous) would become superfluous. (Cf. Reed v. Gallagher

(2016) 248 Cal.App.4th 841, 853 [when decision is correct on any theory applicable to

the case, appellate court will affirm the decision regardless of correctness of grounds

relied on below to reach conclusion].) We believe resolution of the question left open in

Seal Beach is also appropriate because it provides some illumination for our analysis of

whether City violated its MMBA obligations when it placed the CPRI on the ballot

without first meeting and conferring with the unions.

25 The governing body arguably has some flexibility as to at which election the

initiative is presented to the voters (Jeffrey v. Superior Court (2002) 102 Cal.App.4th 1,

4-10), but PERB cites no authority that such flexibility would have permitted the City

Council to refuse to place the CPRI on a ballot without modification in contravention of

the mandatory language contained in Elections Code section 9255.

30

ballot"].) Because "[p]rocedural requirements which govern council action . . . generally

do not apply to initiatives" (Associated Home Builders etc., Inc. v. City of Livermore

(1976) 18 Cal.3d 582, 594), the courts have repeatedly noted "it is well established . . .

that the existence of procedural requirements for the adoptions of local ordinances

generally does not imply a restriction of the power of [a citizen-sponsored] initiative

. . . ." (DeVita v. County of Napa (1995) 9 Cal.4th 763, 785; accord, Building Industry

Assn. v. City of Camarillo (1986) 41 Cal.3d 810, 823-824 [procedural requirements of

§ 65863.6, which must be met before local agency adopts no-growth ordinance,

inapplicable to voter-sponsored initiative adopting no-growth ordinance].)

In contrast, when a governing body of a city votes to adopt a proposal for

submission to its voters, such action is a discretionary rather than ministerial

determination by the governing body. (See, e.g., Friends of Sierra Madre v. City of

Sierra Madre (2001) 25 Cal.4th 165, 187 (Friends of Sierra Madre).) Because of the

"clear distinction between voter-sponsored and city-council-generated initiatives" (id. at

p. 189), the courts have repeatedly concluded the same procedural limitations that would

otherwise apply to the same discretionary determination by a governing body will apply

to a city council-generated ballot proposal. Thus, in Friends of Sierra Madre, the court

held that the procedural mandates of CEQA were required for a ballot measure, generated

by a city council in exercise of its discretion, which would remove certain structures from

protection as historic landmarks. While similar citizen-sponsored measures do not

require compliance with analogous regulatory procedural prerequisites (see, e.g., Stein v.

31

City of Santa Monica (1980) 110 Cal.App.3d 458, 460-461; cf. Tuolumne Jobs & Small

Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1035-1037), Friends of

Sierra Madre concluded a city council-sponsored ballot proposal for a discretionary

project could not evade compliance with CEQA. (Friends of Sierra Madre, at pp. 186-

191.)

In this setting, Seal Beach concluded the procedural requirements of the MMBA

did apply to a city council-sponsored ballot proposal amending the charter as to matters

concerning the terms and conditions of public employment. The court reasoned the meet-

and-confer requirements, imposed on public agencies as procedural requirements a public

agency must satisfy before adopting its final budget for the ensuing year (Seal Beach,

supra, 36 Cal.3d at pp. 596-597), were procedural requirements that could coexist with

the constitutional power of a city council to propose a substantive charter amendment.

(Id. at p. 600, fn. 11 [noting "there is a clear distinction between the substance of a public

employee labor issue and the procedure by which it is resolved" and acknowledging that

although salaries of local employees of a charter city constitute municipal affairs not

subject to general laws, the process by which salaries are fixed is matter of statewide

concern].) Seal Beach noted that "[a]lthough [section 3505] encourages binding

agreements resulting from the parties' bargaining, the governing body of the agency—

here the city council—retains the ultimate power to refuse an agreement and to make its

own decision. [Citation.] This power preserves the council's rights under article XI,

section 3, subdivision (b)—it may still propose a charter amendment if the meet-and-

32

confer process does not persuade it otherwise. [¶] We therefore conclude that the meet-

and-confer requirement of section 3505 is compatible with the city council's

constitutional power to propose charter amendments." (Id. at p. 601, fn. omitted.)

The core tenets of Seal Beach were that (1) the MMBA was clearly intended to

apply to regulate actions by the governing bodies of charter cities and (2) the MMBA

mandates that those governing bodies satisfy the procedural prerequisites (the meet-and-

confer process) before unilaterally imposing any changes to the matters within the scope

of representation. (Seal Beach, supra, 36 Cal.3d at pp. 596-597.) From those tenets, Seal

Beach concluded a governing body constrained by the procedural requirements of the

MMBA cannot circumvent the meet-and-confer requirement by using a charter

amendment to unilaterally implement the same changes that would otherwise be

subjected to the meet-and-confer requirement. (Id. at p. 602.)26

In contrast, the courts have refused to subject citizen-sponsored initiatives to the

same procedural constraints that would apply if the same subject matter were embodied

in a city council-sponsored ballot proposal (compare Stein v. City of Santa Monica,

26 Indeed, Seal Beach specifically noted that "[t]he logical consequence of the city's

position is, actually, that the MMBA cannot be applied to charter cities at all. If a meet-

and-confer session with the city council concerning contemplated charter amendments

impinges on the council's constitutional power, what of salary ordinances? It is 'firmly

established that the mode and manner of passing ordinances is a municipal affair . . . and

that there can be no implied limitations upon charter powers concerning municipal

affairs.' [(Quoting Adler v. City Council (1960) 184 Cal.App.2d 763, 776-777.)] If

meeting and conferring on charter amendments is an illegal limitations [sic] on the city

council's power, why is the same not true of any ordinance which affects 'terms and

conditions of public employment?' " (Id. at p. 602, fn. 12.)

33

supra, 110 Cal.App.3d at pp. 460-461 with Friends of Sierra Madre, supra, 25 Cal.4th at

pp. 186-191), which militates in favor of a conclusion that the procedural meet-and-

confer obligation cannot be superimposed on a citizen-sponsored initiative addressing

matters within the "scope of representation" as that term is used in the MMBA. (Accord,

Native American Sacred Site & Environmental Protection Assn. v. City of San Juan

Capistrano (2004) 120 Cal.App.4th 961, 968 ["it is plain that voter-sponsored initiatives

are not subject to the procedural requirements that might be imposed on statutes or

ordinances proposed and adopted by a legislative body, regardless of the substantive law

that might be involved"].) More importantly, the meet-and-confer requirements of the

MMBA by its express terms constrains only proposals by the "governing body"

(§§ 3504.5, subd. (a) ["the governing body . . . shall give reasonable written notice . . . of

any ordinance, rule, resolution, or regulation directly relating to matters within the scope

of representation proposed to be adopted by the governing body"] & 3505 ["[t]he

governing body . . . shall meet and confer . . . prior to arriving at a determination of

policy or course of action].) Because a citizen-sponsored initiative does not involve a

proposal by the "governing body," we are convinced there are no analogous meet-and-

confer requirements for citizen-sponsored initiatives.27

27 Indeed, we are convinced that imposing a "meet-and-confer" obligation on a city

before it can place a citizen-sponsored initiative on the ballot would also be inconsistent

with the "the rule under the MMBA 'that a public agency is bound to so "meet and

confer" only in respect to "any agreement that the public agency is authorized [by law] to

make . . . ." [Citation.]' [Citation.] As a practical matter, it would be inappropriate to

attribute to the Legislature a purpose of requiring the County to make very substantial

negotiating expenditures on subjects over which the County has no authority to act.

34

PERB's Contrary Analysis Is Unpersuasive

The PERB decision ostensibly "decline[d] to decide" the "significant and difficult

questions about the applicability of the MMBA's meet-and-confer requirement to a pure

citizens' initiative," which it appeared to deem unnecessary because it concluded the

CPRI was not a "pure" citizen-sponsored initiative because of Sanders's involvement in

promoting the CPRI. However, PERB nevertheless appeared to conclude the citizen's

initiative rights enshrined in article II, section 11, and article XI, section 3, subdivision

(b), of the California Constitution would not obviate the meet-and-confer obligations

imposed on City by the MMBA.28 In this writ proceeding, PERB and Unions appear to

Nothing in the statutory language calls for this result. As in other areas of the law, the

MMBA is not to be construed to require meaningless acts." (American Federation of

State, etc. Employees v. County of San Diego (1992) 11 Cal.App.4th 506, 517.) Because

a governing body lacks authority to make any changes to a duly qualified citizen's

initiative (Elec. Code, § 9032), and instead must simply place it on the ballot without

change (Save Stanislaus Area Farm Economy v. Board of Supervisors, supra, 13

Cal.App.4th at pp. 148-149), imposing a meet-and-confer obligation on the governing

body before it could place a duly qualified citizen's initiative on the ballot would require

an idle act by the governing body.

28 Specifically, PERB's decision reasoned (1) the local electorate's right to legislate

directly is generally co-extensive with the legislative power of the local governing body,

(2) the constitutional right of a local electorate to legislate by initiative extends only to

municipal affairs and (as such) is preempted by general laws affecting matters of

statewide concern, and (3) "[l]egislation establishing a uniform system of fair labor

practices, including the collective bargaining process between local government agencies

and employee organizations representing public employees, is 'an area of statewide

concern that justifies . . . restriction' on the local electorate's power to legislate through

the initiative or referendum process" (quoting and relying on Voters for Responsible

Retirement v. Board of Supervisors (1994) 8 Cal.4th 765, 780 (Voters)). These

authorities apparently led PERB to conclude that "[w]here local control implicates

matters of statewide concern" and the two competing interests cannot be harmonized,

35

resurrect this argument, asserting the PERB decision does no violence to the citizen's

initiative process. Specifically, they note the Legislature can limit (or entirely preempt)

the local initiative power on matters of statewide (as opposed to purely local) concern,

and contend that because the Supreme Court in Voters concluded a local referendum

could not be used to reverse the adoption of a memorandum of understanding (MOU)

following negotiations pursuant to the MMBA because allowing such use of the

referendum would harm the statewide interest underlying the MMBA, the same

conclusion applies equally to the initiative process. Accordingly, PERB and Unions

argue that when the electorate seeks to exercise control over matters (such as pension

benefits) that would be negotiable subjects under the MMBA, the constitutional right of

initiative must yield to the statewide objectives of the MMBA, including the procedural

requirements of the MMBA imposing a meet-and-confer process before proposals

impacting negotiable subjects may be adopted.29

"the constitutional right of local initiative is preempted by the general laws affecting

statewide concerns."

29 PERB's decision did recognize that at least one recent Supreme Court case

(Tuolumne Jobs & Small Business Alliance v. Superior Court, supra, 59 Cal.4th 1029)

concluded certain procedural prerequisites under CEQA that would apply before a

governing body may make a discretionary determination do not apply to adoption of

initiatives seeking to enact that same determination. Moreover, PERB acknowledges

numerous other courts have reached the same conclusion as to other procedural

prerequisites. (See, e.g., Associated Home Builders, Inc. v. City of Livermore, supra, 18

Cal.3d at p. 594 [holding that state law, which required any ordinance changing zoning or

imposing specified land use restrictions can be enacted only after noticed hearing before

the city's planning commission and legislative body, does not apply to initiative enacting

same type of ordinance]; Building Industry Assn. v. City of Camarillo, supra, 41 Cal.3d at

pp. 823-824 [procedural requirements of § 65863.6, which must be met before local

36

We believe PERB and Unions misconstrue, and hence overstate, the import of

Voters. The Voters court addressed a distinct and limited issue: whether voters in a

county were entitled to mount a referendum challenge to a county ordinance (which

adopted an MOU impacting county employee pension benefits) under the relevant

constitutional and statutory provisions. The court first concluded that article XI, section

1, subdivision (b), of the California Constitution neither authorized nor restricted voters

from challenging the county ordinance by referendum. (Voters, supra, 8 Cal.4th at

pp. 770-776.) The court, after recognizing courts should apply a liberal construction to

the initiative power, with any reasonable doubt resolved in favor of preserving it, opined

that "we will presume, absent a clear showing of the Legislature's intent to the contrary,

that legislative decisions of a city council or board of supervisors—including local

employee compensation decisions [citation]—are subject to initiative and referendum. In

this case, the legislative intent to bar the referendum power over the ordinance in

question is unmistakable." (Id. at p. 777, italics added.) Specifically, Voters determined

the Legislature, by its enactment of section 25123, subdivision (e), evinced an

unmistakable legislative intent to bar challenges by referendum to county ordinances

agency adopts no-growth ordinance, inapplicable to citizen's initiative adopting no-

growth ordinance]; Dwyer v. City Council of Berkeley (1927) 200 Cal. 505; DeVita v.

County of Napa, supra, 9 Cal.4th at p. 785 ["the existence of procedural requirements for

the adoptions of local ordinances generally does not imply a restriction of the power of [a

citizen-sponsored] initiative"].) However, PERB peremptorily concluded (and argues

here) the MMBA's meet-and-confer procedure is somehow "qualitatively different" from

these other provisions, and thus exempted from the type of procedural rules that

ordinarily do not apply to initiatives.

37

specifically related to the adoption or implementation of MOU's. (Voters, at pp. 777-

778.)30 The Voters court then rejected the petitioner's claim that section 25123,

subdivision (e), was unconstitutional, reasoning the Legislature may properly restrict the

right of referendum "if this is done as part of the exercise of its plenary power to legislate

in matters of statewide concern," and concluded it was required to uphold section 25123,

subdivision (e)'s constitutionality if its referendum restriction, which was effectively an

"implied delegation of exclusive decisionmaking authority to the boards of supervisors to

adopt and implement memoranda of understanding between counties and their employee

30 The court explained the legislative procedures for county referenda are set forth in

the Elections Code. Those statutes provide that all county ordinances, with certain

enumerated exceptions, "shall become effective 30 days from and after the date of final

passage" by the board of supervisors (Elec. Code, § 9141, subd. (b)), and Elections Code

section 9144 provides that between the date of the adoption of the ordinance and the date

the ordinance becomes finally effective 30 days later, a petition signed by the requisite

number of voters will suspend the ordinance and compel the board of supervisors to

reconsider it. If the board of supervisors fails to "entirely repeal" the ordinance, it must

be submitted to a countywide referendum. (Id., § 9145.) However, Elections Code

section 9141 excepts certain types of county ordinances from the 30-day effective date

rule, providing instead that these ordinances go into effect immediately, including

ordinances "specifically required by law to take immediate effect." (Id., subd. (a)(2).)

These provisions, when read together, "make[] clear that when the Legislature desired to

denominate certain types of ordinances that were not subject to county referendum

procedures, it did so not by specifically declaring these ordinances ineligible for

referendum, but rather by providing that they go into effect immediately." (Voters,

supra, 8 Cal.4th at p. 777.) The court then noted section 25123 (which parallels Elec.

Code, § 9141 et seq. in providing all county ordinances shall become effective 30 days

from final passage except for certain classes of ordinances, which are to go into effect

immediately), specifically provides at subdivision (e) that ordinances related to the

adoption or implementation of MOU's with employee organizations are to take effect

immediately. This statutory scheme convinced the court that, by designating MOU

ordinances as a class of ordinances specifically required by law to take effect

immediately, the Legislature evinced an unmistakable intent to exempt such ordinances

from the referendum procedures. (Voters, supra.)

38

associations" (Voters, at p. 780), could be construed as fulfilling some legislative purpose

of statewide import. The court inferred the legislative purpose of statewide import

existed because of the MMBA, which was "a statutory scheme in an area of statewide

concern that justifies the referendum restriction inherent in section 25123, subdivision

(e)." (Id. at pp. 780, 778-784.)

The distinct and limited issue examined in Voters—whether the Legislature clearly

and unmistakably intended to delimit the electorate's referendum rights and (if so)

whether that constraint was constitutionally permissible—has no applicable counterpart

here. Although Voters would support the constitutionality of an enactment by the

California Legislature barring citizen initiatives that seek to amend a city charter to limit

employee compensation, we are unaware of any statute clearly and unmistakably barring

such citizen initiatives31 (nor have PERB or Unions identified any such bar) and "we

will presume, absent a clear showing of the Legislature's intent to the contrary, that . . .

local employee compensation decisions [citation] . . . are subject to initiative and

referendum." (Voters, supra, 8 Cal.4th at p. 777.) The courts have repeatedly upheld the

ability of the electorate of a charter city to legislate on compensation issues by initiative

(see, e.g., Spencer v. City of Alhambra (1941) 44 Cal.App.2d 75, 77-79; Kugler v. Yocum

(1968) 69 Cal.2d 371, 374-377 (Kugler)), and the Voters court specifically declined to

extend its holding to overrule another decision, United Public Employees v. City and

31 Indeed, the Voters court noted the statute it was considering "is applicable to

counties only and has no counterpart for cities," and hence cautioned that "[w]e do not

decide whether city ordinances that adopt or implement memorandums of understanding

pursuant to the MMBA are subject to referendum." (8 Cal.4th at p. 784, fn. 6.)

39

County of San Francisco (1987) 190 Cal.App.3d 419, which concluded a charter

provision requiring that all increases in employee benefits be subject to voter approval by

referendum was compatible with the MMBA. (Voters, at pp. 781-782 & fn. 4.)

Thus, contrary to PERB and Union's arguments, Voters does not support the

conclusion that the MMBA preempts, or superimposes procedural restrictions on, the

right of citizens to invoke the initiative process to legislate on compensation issues for the

employees of a charter city.

Conclusion

We conclude, in light of the language of the MMBA and the "clear distinction

between voter-sponsored and city-council-generated initiatives" (Friends of Sierra

Madre, supra, 25 Cal.4th at p. 189), a city has no obligation under the MMBA to meet

and confer before placing a duly qualified citizen-sponsored initiative on the ballot

because such an initiative does not involve a proposal by the "governing body" nor could

produce an agreement regarding such an initiative that the public agency is authorized to

make.

C. PERB's Determination That City Was Obligated by the MMBA to Meet and

Confer Before Placing the CPRI on the Ballot Is Erroneous

PERB concluded City owed, but failed to discharge, the meet-and-confer

obligations imposed by the MMBA on governing bodies by placing the CPRI on the

ballot without first meeting and conferring with unions. We have already concluded,

contrary to PERB's apparent opposing conclusion, a governing body has no obligation to

40

meet and confer before placing a duly qualified citizen-sponsored initiative on the ballot,

but does have meet-and-confer obligations before placing on the ballot a proposal

adopted by the governing body that falls within the parameters of sections 3504.5 and

3505.32 We thus turn to the critical question: whether PERB correctly held the CPRI

was not a duly qualified citizen-sponsored initiative exempted from the meet-and-confer

requirements, but was instead a governing-body-sponsored ballot proposal within the

ambit of Seal Beach and the meet-and-confer obligations the MMBA imposes on actions

that constitute a "determination of policy" (§ 3505) that have been "proposed [for]

adopt[ion] by the governing body" (§ 3504.5, subd. (a)) within the meaning of the

MMBA.

We begin by noting the evidence was undisputed (and PERB did not conclude to

the contrary) the charter amendment embodied in the CPRI was placed on the ballot

because it qualified for the ballot under the "citizen initiative" procedures for charter

amendments as provided by the first clause of article XI, section 3, subdivision (b), of the

California Constitution (which provides that a charter amendment "may be proposed by

initiative or by the governing body") and the governing provisions of Elections Code

32 The parties have brought to our attention the recent decision in City of Palo Alto v.

Public Employment Relations Bd. (2016) 5 Cal.App.5th 1271, which evaluated whether

the City of Palo Alto committed an unfair labor practice when it failed to meet and

consult with the unions before placing a ballot proposal on the ballot. We conclude that

case provides no guidance here because it involved whether a governing body owed

meet-and-consult obligations before it could place a city council-sponsored ballot

proposal on the ballot (id. at p. 1284), and not whether a governing body owes meet-and-

confer obligations for a citizen-sponsored initiative when some city officials and city staff

members assisted in drafting and campaigning for the initiative.

41

9200 et seq. We also note there was no evidence, and PERB did not find, that the charter

amendment embodied in the CPRI was placed on the ballot because it qualified as a

ballot measure sponsored or proposed by the governing body of City under the second

clause of article XI, section 3, subdivision (b), of the California Constitution.33 (See

generally Hernandez v. County of Los Angeles (2008) 167 Cal.App.4th 12, 21 ["Under

the California Constitution there are only two methods for proposing an amendment to a

city charter: (1) an initiative qualified for the ballot through signed voter petitions; or (2)

a ballot measure sponsored by the governing body of the city," and noting differing

standards applicable to each].) Accordingly, we evaluate whether PERB's decision,

which appears to rest on the theory that the participation by a few government officials

33 Finally, we note the record is devoid of any evidence, and PERB did not find, that

the Proponents of the CPRI were merely straw men used by the City Council (as

governing body for City) to achieve placement of a City Council-sponsored proposal onto

the ballot as a ruse to circumvent the concomitant meet-and-confer obligations that would

have been required for an overt City Council-sponsored ballot proposal. In San Diego

Municipal Employees, supra, 206 Cal.App.4th 1447, this court noted the unions' UPC's

alleged a significant factual claim—that the CPRI was not a true citizen-sponsored

initiative but was instead a sham device employed to circumvent the meet-and-confer

obligations owed by City under the MMBA (id. at p. 1463)—which in turn raised the

question of whether "the CPRI (while nominally a citizen initiative) was actually placed

on the ballot by City using straw men to avoid its MMBA obligations." (Id. at p. 1460.)

It was because such activity was arguably prohibited by public employment labor law

within PERB's initial exclusive jurisdiction (ibid.) that led us to conclude it was error to

divest PERB of its ability to conduct proceedings on this issue. (Ibid.) However, PERB's

decision did not sustain this allegation; to the contrary, PERB's decision appeared to

reject the Unions' claims that Proponents acted as agents for City in pursuing the CPRI.

Accordingly, we have no occasion to address the distinct issue of whether an entity

would violate its meet-and-confer obligations if its governing body sought to avoid its

meet-and-confer obligations by enlisting private citizens to recast a governing-body-

sponsored ballot proposal into a citizen-sponsored initiative.

42

and employees in drafting and campaigning for a citizen-sponsored initiative somehow

converted the CPRI from a citizen-sponsored initiative into a governing-body-sponsored

ballot proposal, is erroneous under applicable law.

We conclude PERB's determination was error. As a preliminary matter, we

believe that, under Yamaha, supra, 19 Cal.4th 1, we must apply de novo review of

PERB's determination, rather than the more deferential standards of review advocated by

PERB and Unions, because PERB's determination turned almost entirely upon its

application of the interplay among City's charter provisions (and Sanders's powers and

responsibilities thereunder), common law principles of agency, and California's

constitutional and statutory provisions governing charter amendments, and did not turn

upon resolution of material factual disputes (to which the deferential "substantial

evidence" standard would apply) or upon PERB's application of legal principles of which

PERB's special expertise with the legal and regulatory milieu surrounding the disputed

legal principles would warrant deference. Accordingly, we accord no deference to

PERB's legal conclusions as to the constitutional or statutory scheme governing

initiatives (Overstreet ex rel. NLRB v. United Brotherhood of Carpenters and Joiners of

America, Local Union No. 1506, supra, 409 F.3d 1199, 1208-1209; Azusa Land Partners

v. Department of Indus. Relations, supra, 191 Cal.App.4th at p. 14) or to PERB's

application of common law principles of agency over which PERB has no specialized

43

expertise warranting deference.34 (Cf. Styrene Information and Research Center v.

Office of Environmental Health Hazard Assessment (2012) 210 Cal.App.4th 1082, 1100

[no deference where agency in question has no particular interpretive advantage over the

courts based on some expertise]; Sanchez v. Unemployment Ins. Appeals Bd. (1984) 36

Cal.3d 575, 584-585 [agency denied applicant unemployment benefits based on finding

employee lacked "good cause" to leave employment; court reviewed lack of good cause

finding de novo as issue of law].)

34 PERB, citing Garlock Sealing Technologies, LLC v. NAK Sealing Technologies

Corp. (2007) 148 Cal.App.4th 937, 965, argues on appeal that because the existence of an

agency relationship is a question of fact, we must defer to PERB's determination on

appeal as long as it is supported by substantial evidence. Certainly, the existence of an

agency relationship can present a question of fact. However, when the material facts are

undisputed, the question of the existence of a principal-agent relationship is a matter of

law for the courts (see, e.g., Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997)

59 Cal.App.4th 741, 745), of which PERB has no specialized expertise. Indeed, because

we will conclude the relevant inquiry is not whether Sanders was an agent for City (at

least in some capacities), but instead whether he was the actual or ostensible agent for the

governing body when he helped draft and campaign for the CPRI, we will examine

whether PERB correctly concluded Sanders's actions can be charged to a governing body

under common law principles. For example, under common law principles, unless a

party (the putative principal) has the legal right to control the action of the other person

(the putative agent), the former ordinarily cannot be held vicariously liable for the other

person's acts on an agency theory. (See generally Edwards v. Freeman (1949) 34 Cal.2d

589, 592 [absent right of control, no true agency and therefore no imputation of

wrongdoer's negligence]; Kaplan, at p. 746 ["Absent a showing that Coldwell Banker

controlled or had the right to control the day-to-day operations of Marsh's office, it was

not liable for Marsh's acts or omissions as a real estate broker on a true agency-

respondeat superior theory."].) Thus, even if the appropriate inquiry was under a

"substantial evidence" rubric, there is no evidence the City Council had the right to

control Sanders's actions here, and hence there would be no substantial evidence to

support the conclusion Sanders was the agent of the City Council in promulgating and

promoting the CPRI.

44

It is clear that, apart from charter commission proposals (see generally §§ 34451-

34458), California recognizes only two avenues by which a proposed city charter

amendment may be placed before the electorate: an initiative that qualifies for the ballot

through signed voter petitions, or a ballot proposal that qualifies for the ballot because the

governing body (here, the City Council) adopts a resolution placing it on the ballot.35

(Hernandez v. County of Los Angeles, supra, 167 Cal.App.4th at p. 21.) Whether PERB

correctly concluded meet-and-confer obligations were triggered here rests on whether it

properly recast the CPRI from the former into the latter. Because PERB employed

several variants of agency theory to reformulate the CPRI from a citizen-sponsored

proposal to a City Council-sponsored proposal, we examine PERB's theories seriatim.

Statutory Agency

PERB's first theory, which it denominated as a statutory agency theory, focused on

the fact that Sanders, both in his capacity as a so-called "strong mayor" and in his role as

the lead negotiator for the City Council in labor-related matters,36 was empowered by the

35 Section 34458 et seq. prescribing the methods for a governing body to place a

proposed charter amendment before the voters, only appears to permit "the governing

body" to make the proposal and submit it to the voters for approval. (Id., subd. (a).)

36 Sanders was the City's lead negotiator in collective bargaining with the City's nine

represented bargaining units. In this role, Sanders developed proposals for the City's

initial bargaining proposals, but the practice was for the Mayor to brief and obtain

approval from the City Council on his proposals before he presented them to the Unions.

If the negotiations between Sanders and a bargaining unit produced a tentative

agreement, however, Council Policy 300-06 still required the agreement be presented to

the City Council (or the Civil Service Commission) for determination and adoption.

Thus, the ultimate authority to approve a proposal remained with the City Council.

45

City Charter to recommend "measures and ordinances" that he believed to be "necessary

and expedient" (San Diego City Charter, art. XV, § 265(b)(3)), including

recommendations encompassed in his "State of the City" address. (Id., art. XV,

§ 265(c).) From these predicates, PERB deemed the activities of Sanders in aiding in the

drafting of and campaign for the CPRI (both individually and insofar as additional

actions were undertaken by the staff of his mayoral office at his direction) to have been

the actions of the City Council because he was the "statutory agent" for the City Council

in labor-related matters. Under this theory, PERB appeared to rule that (1) the CPRI was

sufficiently interwoven with Sanders's proposal such that the CPRI was as much

Sanders's proposal as it was the Proponents' proposal, and (2) Sanders was statutorily

empowered to act on behalf of (and to make proposals on labor-related matters for) the

City Council in labor-related matters, and therefore the CPRI became a City Council-

sponsored (or at least co-sponsored) proposal carrying meet-and-confer obligations

within the meaning of Seal Beach.37

37 PERB also appeared to conclude that, because section 3505 states (in relevant

part) that "The governing body of a public agency, . . . or other representatives as may be

properly designated by law or by such governing body, shall meet and confer," the

Legislature contemplated that, in addition to the governing body of an agency, other

designated representatives would make policy decisions on behalf of the agency and that

such decisions would trigger meet-and-confer obligations. We reject this reading of the

statutory scheme. Section 3504.5, subdivision (a) describes when meet-and-confer

obligations are triggered (i.e. when there is an "ordinance, rule, resolution, or regulation

directly relating to matters within the scope of representation proposed to be adopted by

the governing body"), and section 3505 describes how that process should be

accomplished, including who (i.e. the "governing body . . . or other representatives as

may be properly designated by law or by such governing body") shall participate on

behalf of the governing body. The designation in section 3505 of who shall conduct the

46

We conclude reliance on this theory was error because it ignores fundamental

principles governing the charter amendment process and the conduct of municipal affairs.

First, a charter amendment measure only becomes a "proposal" if it qualifies for the

ballot under the citizen-sponsored-proposal provisions (for which no meet-and-confer

obligation exists) or qualifies for the ballot as a governing-body-sponsored ballot

measure (which would trigger meet-and-confer obligations) under section 34458 et seq.

PERB's statutory agency theory essentially deemed Sanders's actions to have been those

of the City Council, thereby treating the CPRI as a governing-body-sponsored ballot

measure, even though the City Charter38 specifically provides all legislative powers of

the City are vested in the City Council (San Diego City Charter, art. III, § 11) as City's

legislative body (id., art. XV, § 270(a)), and provides such legislative power may not be

delegated (id., art. III, § 11.1) but must be exercised by a majority vote of the elected

councilmembers. (Id., art III, § 15 & art. XV, § 270(c).) PERB cites no law suggesting

meet-and-confer process does not expand who owes the meet-and-confer obligations

imposed by section 3405.5.

38 PERB asserts in this proceeding that, although it introduced portions of the San

Diego City Charter to support its statutory agency claim, it is improper for this court to

consider the impact of City Charter provisions not introduced below and not presently the

subject of a request for judicial notice. However, charter provisions are judicially

noticeable materials (cf. Giles v. Horn (2002) 100 Cal.App.4th 206, 225, fn. 6), and we

are aware of no impediment to judicially noticing those provisions on our own motion

(PG&E Corp. v. Public Utilities Com. (2004) 118 Cal.App.4th 1174, 1204, fn. 25),

particularly where it is necessary to examine the entirety of a document to construe the

effect of individual portions contained therein. (See generally Dow v. Lassen Irrigation

Co. (2013) 216 Cal.App.4th 766, 780-781.) Accordingly, we will take judicial notice of

the provisions of the San Diego City Charter.

47

Sanders was in fact (or even could have been) statutorily delegated the power to place a

City Council-sponsored ballot proposal on the ballot without submitting it to (and

obtaining approval from) the City Council (Kugler, supra, 69 Cal.2d at p. 375 [legislative

power may not be delegated]; City of Redwood City v. Moore (1965) 231 Cal.App.2d

563, 575-576, disapproved on other grounds by Bishop v City of San Jose (1969) 1 Cal.3d

56, 63, fn. 6 [recognizing "the general principle that the public powers or trusts devolved

by law or charter upon a governing body cannot be delegated to others"]), and because

there was no evidence suggesting Sanders sought or obtained such approval, PERB erred

in concluding Sanders's actions in supporting the CPRI were in fact acts creating a City

Council-sponsored ballot proposal. (Cf. First Street Plaza Partners v. City of Los

Angeles (1998) 65 Cal.App.4th 650, 667 [where city charter prescribes procedures for

taking binding action, those requirements may not be deemed satisfied by implication

from use of procedures different from those specified in charter]; Dynamic Ind. Co. v.

City of Long Beach (1958) 159 Cal.App.2d 294, 299 ["When the charter provision has

not been complied with, the city may not be held liable in quasi contract, and it will not

be estopped to deny the validity of the contract"].)

PERB nevertheless argues its agency theory was correct because employers

(including governmental entities) can be held liable for unfair labor practices committed

by their agent even when the agent's actions were not formally approved by the

governing body. PERB also asserts its agency theory is supported by a 2008 opinion by a

former City Attorney (the Aguirre Memo) that concluded, if the Mayor "initiate[d] or

48

sponsor[ed]" a voter petition drive to place a measure on the ballot to amend the City

Charter provisions related to retirement pensions, City "would have the same meet-and-

confer obligations with its unions over a voter-initiative sponsored by the Mayor as with

any City proposal implicating wages, hours, or other terms and conditions of

employment."

We are unconvinced the Aguirre Memo undermines our analysis, for several

reasons. First, a later opinion from the City Attorney rejected the conclusions of the

Aguirre Memo, which it described as "overly broad and incomplete in its analysis," and

explained why the City Attorney believed the conclusions reached by the Aguirre Memo

were unsound.39 Second, PERB cites nothing to suggest the opinions expressed in the

Aguirre Memo are somehow binding on City, much less that such opinions are entitled to

any deference by this court. (Yamaha, supra, 19 Cal.4th 1, 11 ["an agency's legal

opinion, however 'expert,' . . . commands a commensurably lesser degree of judicial

deference"].) Because the Aguirre Memo reached its conclusions without considering (or

even mentioning) the limiting language of section 3404.5, which triggers meet-and-

confer obligations only as to "any ordinance, rule, resolution, or regulation . . . proposed

to be adopted by the governing body," its conclusion that meet-and-confer obligations

39 Specifically, the later letter explained the Aguirre Memo had relied on a

misapplication of Inglewood Teachers Assn. v. Public Employment Relations Bd. (1991)

227 Ca1.App.3d 767 (Inglewood), and had been generated in a different context in which

"[i]t was contemplated the Mayor's proposal would be submitted to voters as a City

Council proposal." The later letter explained the Aguirre Memo did not address whether

any meet-and-confer obligation would exist when "there is no evidence . . . that the City

Council is proposing the [CPRI], or authorizing the Mayor to propose or sponsor it."

49

exist for a Mayoral-initiated voter petition drive (which appears to have rested on the

erroneous assumption that a measure supported by the Mayor is equivalent to a measure

proposed to be adopted by the governing body) is unpersuasive.

We are equally unpersuaded that the cases cited by PERB that upheld unfair labor

practices claims against governmental entities for conduct by their agents even when the

agent's actions were undertaken without approval by the governing body have any

relevance here. In the cases relied on by PERB, the agents' unapproved actions involved

statements or actions by the agents that are declared to be unfair labor practices without

the necessity of any predicate involvement by the governing body. Specifically, the

unapproved actions interfered with, restrained, or coerced the employees in violation of

section 3506 of the MMBA (see Public Employees Assn. v. Bd. of Supervisors (1985) 167

Cal.App.3d 797, 806-807 ["section 3506 is patterned closely after section 8(a)(1) of the

NLRA [citation], which provides it is an unfair labor practice for an employer to

'interfere with, restrain, or coerce' employees in the exercise of rights to 'bargain

collectively' "]) or in violation of section 3543.5, subdivision (a). However, both of those

sections are distinct from section 3504.5, because both of those sections condemn

specified conduct as unlawful labor practices, regardless of whether that specified

conduct was accompanied by actions of the governing body.40 In contrast, the unlawful

40 The PERB decisions cited by PERB and Unions are of a similar ilk. For example,

in County of Riverside (2010) PERB Decision No. 2119-M [34 PERC ¶ 108], the alleged

unlawful labor practice included allegations that the defendant interfered with employee

rights because of the unauthorized actions of two county officials, who made separate

statements to SEIU representatives (who were attempting to create a bargaining unit for

50

labor practice condemned by section 3504.5—the failure to meet and confer—is

condemned only if preceded by specified conduct or actions of the governing body, i.e.

when there is an "ordinance, rule, resolution, or regulation directly relating to matters

within the scope of representation proposed to be adopted by the governing body."

Because section 3504.5 requires predicate action by "the governing body" before the

meet-and-confer obligations of section 3505 can be triggered, cases addressing statutes

that do not contemplate similar predicate action by a governing body have no persuasive

value on the issues presented by the present action.

For all of these reasons, we agree with City that PERB erred in applying "statutory

agency" principles to find the CPRI was a de facto governing-body-sponsored ballot

proposal that could have triggered meet-and-confer obligations within the contemplation

of section 3504.5.

Common Law Agency: Actual Authority

PERB's second set of theories, which it denominated as a common law agency

theory, focused on the common law doctrine of when a principal can be charged with the

"TAP" employees) that such employees would get a union when the officials died, retired

or the county went out of business, which PERB concluded violated section 3506's

proscription against interfering with, restraining, or coercing employees in the exercise of

rights to bargain collectively. (County of Riverside, at pp. 16-23.) Similarly, in San

Diego Unified School Dist. (1980) PERB Decision No. 137E [4 PERC ¶ 11115], PERB

concluded the unauthorized action of two school board members in placing letters of

commendation into the personnel files of nonstriking teachers violated the proscription

contained in section 3543.5, subdivision (a), which prohibits a public school employer

from imposing or threatening to impose reprisals on employees because of their exercise

of rights guaranteed under the Educational Employment Relations Act, section 3540 et

seq.

51

acts of its agent. PERB's articulated rationale for attributing Sanders's support of the

CPRI (as putative agent) to the City Council (as putative principal) under "actual

authority" principles was that actual authority is the authority a principal either

intentionally confers on the agent or "by want of ordinary care" allows the agent to

believe himself to possess (Civ. Code, § 2316), and a principal is responsible to third

parties for the wrongful acts of an agent in transacting the principal's business regardless

of whether the acts were authorized or ratified by the principal. (Civ. Code, §§ 2330,

2338.) Under this theory, PERB noted (1) Sanders had broad authority as Mayor to

recommend legislation to the City Council, (2) he pursued pension reform as a goal for

his remaining tenure as Mayor and for the announced purpose of improving the City's

financial well-being, and (3) the City Council was aware of Sanders's desire for pension

reform and of his efforts to implement it through a citizen-sponsored initiative. From

these facts, PERB concluded Sanders's actions could be charged to the City Council

because:

"by want of ordinary care, the City Council allowed Sanders to

believe that he could pursue a citizens' initiative to alter employee

pension benefits, and that no conflict existed between his duties as

the City's chief executive officer and spokesperson for collective

bargaining and his rights as a private citizen. . . . Sanders acted with

actual authority because proposing necessary legislation and

negotiating pension benefits with the Unions were within the scope

of the Mayor's authority and because the City acquiesced to his

public promotion of the initiative, [and] by placing the measure on

the ballot, . . . while accepting the considerable financial benefits

resulting from the passage and implementation of [the CPRI]." (Fn.

omitted.)

52

We conclude PERB's use of a common law agency theory, which PERB appears

to have used in order to find Sanders's actions are to be charged to or deemed the acts of

the City Council, is erroneous.41 "Actual" authority is (1) the authority the principal

intentionally gives the agent, or (2) the authority the principal intentionally or negligently

allows the agent to believe he possesses. (Civ. Code, § 2316.) There is no evidence the

City Council actually authorized Sanders to act on its behalf to formulate and campaign

for the CPRI, nor any evidence Sanders believed he was acting or had the authority to act

on behalf of the City Council when he took those actions.42

41 We accord no deference to PERB's legal conclusions because, although PERB

certainly evaluates and applies common law principles of agency when making its

administrative adjudications (see, e.g., Chula Vista Elementary School Dist. (2004)

PERB Decision No. 1647E [28 PERC ¶ 184] [applying agency principles to hold school

district liable for acts of school principal that constituted unlawful intimidation in

violation of § 3543.5]; Inglewood Unified School Dist. (1990) PERB Decision 792E [14

PERC ¶ 21057] [concluding ALJ erroneously applied agency principles to hold school

district liable for acts of school principal that allegedly constituted unlawful

intimidation]), it has no comparative expertise in the common law that would warrant

deference by this court (California State Teachers' Retirement System v. County of Los

Angeles, supra, 216 Cal.App.4th at p. 55), and we therefore accord no deference to

PERB's legal analysis of common law principles.

42 Indeed, PERB appears to have acknowledged it was not relying on any actual

authorization when applying the actual agency theory, because it acknowledged that

"[u]nder the circumstances, making liability dependent on whether the City Council

expressly authorized Sanders . . . to pursue a pension reform ballot measure would

undermine the principle of bilateral negotiations by exploiting the 'problematic nature of

the relationship between the MMBA and the local [initiative-referendum] power.'

[(Citing Voters, supra, 8 Cal.4th 765, 782.)]" Moreover, when PERB evaluated whether

the City Council had " 'intentionally, or by want of ordinary care' " induced Sanders to

believe he was acting on behalf of the City Council when he took those actions, PERB

merely recited that Sanders "believed pension reform was needed to eliminate the City's

$73 million structural budget deficit" and could be accomplished by the CPRI and

therefore "believed himself to be acting on behalf of the City." However, PERB

53

PERB's "Apparent Agency" Theory43

PERB's decision also relied on common law agency principles of "apparent

authority" to support charging the City Council (as putative principal) with the acts of

Sanders (as putative agent) in promulgating and supporting the CPRI. PERB's articulated

rationale for attributing Sanders's support of the CPRI to the City Council under

"apparent" authority principles was that the City Council intentionally or negligently

caused or allowed the employees to reasonably believe Sanders was acting on behalf of

the City Council in promulgating and supporting the CPRI within the meaning of the

apparent authority principles codified in Civil Code section 2317. PERB, although

acknowledging that Inglewood, supra, 227 Ca1.App.3d 767 required the party asserting

an agency relationship by way of apparent authority to satisfy the burden of proving the

elements of that theory (id. at p. 780) and that "[m]ere surmise as to the authority of an

agent is insufficient to impose liability on the principal" (id. at p. 782), concluded

Inglewood's test was satisfied. PERB reasoned that, because employees knew Sanders

erroneously transformed the only "belief" for which there was evidentiary support—that

Sanders believed his support for the CPRI was in the City's best financial interests—into

a finding for which there was no evidentiary support: that the City Council somehow

induced Sanders to believe his actions in promoting the CPRI were on behalf of the City

Council. Although the evidence supports the finding that Sanders believed his actions

promoted the City's best financial interests, there is no evidentiary support he believed he

was promoting the CPRI on behalf of the City Council, and therefore this aspect of

PERB's actual agency theory lacks support.

43 The courts have interchangeably used the nomenclature of "apparent" agency or

"ostensible" agency to describe this principle of vicarious liability. (See, e.g., Hartong v.

Partake, Inc. (1968) 266 Cal.App.2d 942.) We will refer to it, as did PERB, as

"apparent" agency.

54

was an elected official and City's chief executive officer, and knew Sanders touted the

CPRI as a measure that was in the best interests of City, employees "would reasonably

conclude[] that the City Council had authorized or permitted [Sanders] to pursue his

campaign for pension reform to avoid meeting and conferring with employee labor

representatives."

We conclude PERB's "apparent agency" rationale is erroneous, for several

reasons. First, apparent agency focuses on whether the principal (either intentionally or

by want of ordinary care) caused or allowed a third person to believe the agent possessed

authority to act on behalf of the principal (Civ. Code, § 2317), and therefore must be

established through the conduct of the principal and cannot be created merely by a

purported agent's conduct or representations.44 (Mosesian v. Bagdasarian (1968) 260

Cal.App.2d 361, 367; Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122, 1132.)

Thus, even assuming apparent agency could be applied to permit Sanders's actions to

somehow "bind" the City Council into being a co-sponsor of the CPRI,45 PERB's

44 We also note that "[l]iability of the principal for the acts of an ostensible agent

rests on the doctrine of 'estoppel,' the essential elements of which are representations

made by the principal, justifiable reliance by a third party, and a change of position from

such reliance resulting in injury." (Preis v. American Indemnity Co. (1990) 220

Cal.App.3d 752, 761.) PERB's decision does not explain how the third element

necessary to application of the common law principle was satisfied, which further

undermines the propriety of invoking that doctrine in this case.

45 We have substantial doubt an "apparent agency" theory can even be applied here.

In Boren v. State Personnel Bd. (1951) 37 Cal.2d 634, the court (although noting that

"[e]ven in the field of private contracts, the doctrines of ostensible agency or agency by

estoppel are not based upon the representations of the agent but upon the representations

of the principal" (id. at p. 643), rejected a plaintiff's effort to invoke "agency by

55

decision (and PERB's and Unions' briefs on appeal) cite only the actions of Sanders and

his staff as the evidentiary foundation for application of "apparent" agency theory.

Neither PERB's decision nor PERB's and Unions' brief's on appeal cite any evidence that

the putative principal (the City Council) affirmatively did or said anything that could

have caused or allowed a reasonable employee to believe Sanders had been authorized to

act on behalf of the City Council in promoting the CPRI, which undermines PERB's

"apparent" agency theory.46

PERB's "apparent" agency theory in the present decision eschewed any reliance on

affirmative manifestations by the City Council affirming Sanders's support for the CPRI

was on its behalf.47 Instead, PERB relied solely on the fact that Sanders supported the

estoppel," noting that "[t]o invoke estoppel in cases like the present would have the effect

of granting to the state's agents the power to bind the state merely by representing that

they have the power to do so. It [has been] held that the authority of a public officer

cannot be expanded by estoppel. [Citations.]" (Ibid.) We need not decide that issue here

because, even assuming it could apply, there appears to be no evidentiary support for that

theory.

46 We recognize that apparent agency can be premised on inaction by the principal

because "where the principal knows that the agent holds himself out as clothed with

certain authority, and remains silent, such conduct on the part of the principal may give

rise to liability." (Preis v. American Indemnity Co., supra, 220 Cal.App.3d at p. 761.)

However, even assuming this theory can apply here (but see fn. 45, ante), PERB

recognized that Sanders repeatedly stated his efforts in promoting the CPRI were in his

capacity as a private citizen, and there is no evidence Sanders ever claimed his efforts

were as the City Council's representative, which renders the City Council's inaction or

silence incapable of supporting an "apparent" authority finding.

47 PERB's prior decisions have appeared to acknowledge that " 'apparent authority to

act on behalf of the employer may be found where the manifestations of the employer

create a reasonable basis for employees to believe that the employer has authorized the

alleged agent to perform the act in question' " (Trustees of the California State University

56

CPRI while occupying an office the responsibilities of which included acting for the City

Council as the labor relations point man and recommending measures on labor issues to

the City Council, and based thereon concluded Sanders had apparent or actual

discretionary authority to promote the CPRI on behalf of the City Council, and therefore

the City Council can be charged with liability for Sanders's failure to meet and confer

over the CPRI. We recognize that "apparent" agency, like a respondeat superior theory

(see Inglewood, supra, 227 Cal.App.3d at p. 779 [noting courts do not always distinguish

between ostensible agency theory and tort doctrine of respondeat superior]), permits a

third party to hold a principal liable for the wrongful conduct of his agent within the

scope of his authority even where the agent was not operating with the express

authorization of his principal when engaging in that conduct. (See generally Saks v.

Charity Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1137-1139; J.L. v.

Children's Institute, Inc. (2009) 177 Cal.App.4th 388, 403 [noting ostensible agency

principles can be used to hold principal vicariously liable for agent's acts].)48 In the field

(2014) PERB Decision No. 2384-H, p. 39, quoting West Contra Costa County

Healthcare District (2011) PERB Dec. No. 2164-M, p. 7, italics added by Trustees), but

PERB's decision here cites no such conduct by the City Council.

48 Many PERB decisions have also held that an employer's officials, particularly

those whose duties include employee or labor relations or collective bargaining matters,

have been presumed to have acted on behalf of the employer such that their commission

of acts constituting unfair labor practices were imputed to the employer. (San Diego

Unified School Dist., supra, PERB Decision No. 137-E [unauthorized action of two

school board members in placing letters of commendation into the personnel files of

nonstriking teachers violated the proscription violated "no reprisal" rule of § 3543.5,

subd. (a)]; Trustees of the California State University, supra, PERB Decision No. 2384-

H.)

57

of labor relations, some cases decided under the Agricultural Labor Relations Act

(ALRA) have upheld imposing liability on an employer for an act by an agent that

constituted an unfair labor practice, even when such act was not expressly authorized by

the employer, as long as such act was within the scope of the agent's duties.49 (See Vista

49 PERB's brief in this writ proceeding also asserts it was appropriate for the PERB

decision to charge the City Council with Sanders's actions because he "acted within the

scope of his authority as lead labor negotiator" in supporting the CPRI, which can be

sufficient under NLRA precedent (see H. J. Heinz Co. v. NLRB (1941) 311 U.S. 514,

520-521; International Assn. of Machinists v. NLRB (1940) 311 U.S. 72, 80) to charge an

employer with the wrongful conduct of its supervisory personnel. However, the court in

Inglewood recognized NLRA precedent is of limited value in the Education Employment

Relations Act (EERA) arena because "there are significant differences between the two

statutes" and "at times, PERB has even stated that not only is NLRA precedent not

controlling, it may not even be instructive." (Inglewood, supra, 227 Cal.App.3d at

p. 777.) We note that, under the NLRA, an employer is specifically defined to include

"any person acting as an agent of an employer, directly or indirectly" (29 U.S.C.

§ 152(2)), and explicitly states that "[i]n determining whether any person is acting as an

'agent' of another person so as to make such other person responsible for his acts, the

question of whether the specific acts performed were actually authorized or subsequently

ratified shall not be controlling." (29 U.S.C. § 152(13).) In light of that statutory

scheme, the Heinz court explained "[t]he question is not one of legal liability of the

employer in damages or for penalties on principles of agency or respondeat superior, but

only whether the [NLRA] condemns such activities as unfair labor practices so far as the

employer may gain from them any advantage in the bargaining process of a kind which

the Act proscribes." (Heinz, at p. 521.) Although NLRA precedent can be relevant in

some circumstances (see, e.g., International Assn. of Fire Fighters, Local 188, AFL-CIO

v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 272), it is too distinct from

the issue presented here: whether the MMBA was designed to permit the governing body

to be charged with the unapproved conduct of its agents (cf. Inglewood, at p. 778

[rejecting union argument that agent should be included in definition of employer under

EERA, because "[s]ince the Legislature is deemed to be aware of the content of its own

statutory enactments, it is a reasonable inference that the Legislature would have included

the term agent in the definition of employer under the EERA if it wanted school districts

perpetually exposed to liability for any unfair labor practice committed by an agent of a

school district"]), particularly when the specific conduct—compliance with the meet-and-

confer mandate of section 3504.5—is triggered only when there is some action "proposed

58

Verde Farms v. Agricultural Labor Relations Bd. (1981) 29 Cal.3d 307; Superior

Farming Co. v. Agricultural Labor Relations Bd. (1984) 151 Cal.App.3d 100.) However,

decisions under the ALRA provide little guidance because "under the ALRA, application

of the NLRA standard is statutorily mandated" (Inglewood, supra, 227 Cal.App.3d at

p. 778), and those standards are not premised on common law principles (id. at pp. 776-

777; accord, Superior Farming Co., at p. 118 ["employer responsibility for acts of agents

or quasi-agents . . . is not governed by common law agency principles"]; see also fn. 49,

ante), nor have PERB or Unions demonstrated there are sufficient parallels between the

relevant provisions of the MMBA and the ALRA to permit cases decided under the latter

scheme to provide persuasive guidance under the distinct scheme of the MMBA.

More importantly, affixing vicarious liability upon a principal under common law

agency principles, regardless of whether the principal authorized the explicit conduct at

issue, appears to presuppose the agent committed a wrongful act ab initio. (Cf. Bayuk v.

Edson (1965) 236 Cal.App.2d 309, 320.) This theory may well justify charging a

principal with liability for an agent's acts that are inherently wrongful and injurious, such

as the act committed by the agent in Vista Verde Farms v. Agricultural Labor Relations

Bd., supra, 29 Cal.3d at pp. 317-318 (in which the court noted the agent's acts violated

Lab. Code, § 1153 and "would unquestionably constitute an unfair labor practice

[citation] if engaged in directly by the employer"), regardless of whether the principal

to be adopted by the governing body" (§ 3504.5, subd. (a)) rather than some action

proposed by a putative agent of the governing body.

59

authorized those acts. However, the acts alleged here—an individual's advocacy for a

citizen-sponsored initiative effecting employee benefits—is not an inherently wrongful

act,50 nor are we persuaded the MMBA explicitly proscribes such conduct merely

because that individual occupies public office. Instead, the MMBA only requires

compliance with the meet-and-confer mandate of section 3504.5 when there is some

action "proposed to be adopted by the governing body" (id., subd. (a)), and has no

apparent applicability when the "governing body" is not affirmatively involved with the

proposal.

We conclude PERB's reliance on common law principles of "apparent" agency or

respondeat superior, in order to charge the City Council (as putative principal) with the

acts of Sanders (as putative agent) in promulgating and supporting the CPRI despite the

50 To the contrary, Sanders's advocacy for the CPRI is not inherently wrongful, but is

instead protected under both statutory law (see §§ 3203 ["[e]xcept as otherwise provided

in this chapter, or as necessary to meet requirements of federal law as it pertains to a

particular employee or employees, no restriction shall be placed on the political activities

of any officer or employee of a state or local agency"] and 3209 ["[n]othing in this

chapter prevents an officer . . . of a state or local agency from soliciting or receiving

political funds or contributions to promote the passage or defeat of a ballot measure

which would affect the rate of pay, hours of work, retirement, civil service, or other

working conditions of officers or employees of such state or local agency, except that a

state or local agency may prohibit or limit such activities by its employees during their

working hours"]) and under the Constitution. (See generally Wood v. Georgia (1962)

370 U.S. 375, 394 ["petitioner was an elected official and had the right to enter the field

of political controversy"]; Bond v. Floyd (1966) 385 U.S. 116, 136-137.) Accordingly,

common law principles of "apparent" agency or respondeat superior, which permit a third

party to hold a principal liable for the wrongful acts of his agent, have no application

here.

60

absence of any evidence the City Council actually authorized these acts, is without legal

support and was erroneous.

PERB's "Ratification" Theory

PERB's decision also relied on common law principles of "ratification" to support

charging the City Council (as putative principal) with the acts of Sanders (as putative

agent) in promulgating and supporting the CPRI. As articulated by PERB, the City

Council adopted Sanders's actions in promulgating and supporting the CPRI as their own

measure because:

"An agency relationship may also be established by adoption or

subsequent ratification of the acts of another. (Civ. Code, §§ 2307,

2310.) It is well established as a principal of labor law that where a

party ratifies the conduct of another, the party adopting such conduct

also accepts responsibility for any unfair practices implicated by that

conduct. [Citing Compton Unified School District (2003) PERB

Decision No. 1518-E at p. 5 and Dowd v. International

Longshoremen's Assn., AFL-CIO (11th Cir. 1992) 975 F.2d 779,

785-786.] Thus, ratification may impose liability for the acts of

employees or representatives, even when the principal is not at fault

and takes no active part in those acts. [Citation.] Ratification may

be express or implied, and an implied ratification may be found if an

employer fails to investigate or respond to allegations of wrongdoing

by its employee."

PERB's decision, noting it was adequately shown the City Council had actual or

constructive knowledge of Sanders's actions in support of the CPRI, relied on two

grounds for applying "ratification" to convert Sanders's support for the citizen-sponsored

CPRI initiative into City Council support for that initiative: the City Council's inaction

(because it was aware of Sanders's support but did not disavow or repudiate his conduct),

and the City Council's actions in placing the CPRI on the ballot while rejecting Unions'

61

"meet-and-confer" demands and accepting the financial benefits accruing from its

passage. We conclude none of these grounds support PERB's determination that the City

Council can be deemed to have promulgated or supported the CPRI under ratification

principles.51

The first basis for PERB's ratification theory appears to be that the City Council

did not disavow or repudiate his conduct. Although the failure to repudiate otherwise

wrongful conduct can warrant charging a putative principal with responsibility for any

unfair practices implicated by that conduct, as was the case in Compton Unified School

District, supra, PERB Decision No. 1518E [27 PERC ¶ 56] and Dowd v. International

Longshoremen Assn., AFL-CI0, supra, 975 F.2d 779, this presupposes the issue to be

51 We note that, in this writ proceeding, PERB's brief appears to focus almost

exclusively on the foundational issue—whether there was substantial evidence the City

Council was aware of Sanders's conduct and "failed to disavow it"—with almost no

discussion of whether (in light of that knowledge) the City Council's inaction (failure to

disavow), or action (placing the CPRI on the ballot and rejecting Unions' "meet-and-

confer" demands), or acceptance of the financial benefits supports the legal conclusion

that the City Council adopted Sanders's support for the citizen-sponsored CPRI as its own

under ratification principles. Similarly, the Unions' brief is largely silent on this issue,

arguing only that (by failing to meet and confer over the CPRI) "the City Council ratified

[Sanders's] unlawful scheme . . . ." This argument—that the City Council's lawful

rejection of Unions' meet-and-confer demands (based on our conclusion there are no

meet-and-confer obligations on citizen-sponsored initiatives, see part III.B., ante)

converted such conduct into an unlawful rejection of those meet-and-confer demands

under ratification principles—amounts to a petitio principii argument (Jasmine Networks,

Inc. v. Superior Court (2009) 180 Cal.App.4th 980, 1005) and sheds no light on the

propriety of PERB's conclusion. While this lacuna would permit us to deem this claim

abandoned (Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699-700

["[w]hen an issue is unsupported by pertinent or cognizable legal argument it may be

deemed abandoned and discussion by the reviewing court is unnecessary"]), we

nevertheless examine PERB's stated basis for its "ratification" theory.

62

determined: whether Sanders's conduct was an unfair labor practice. (See fn. 50, ante.)

We are aware of no law holding that an elected official's support (however vigorous) for

a citizen-sponsored ballot measure impacting a subject otherwise negotiable under the

MMBA violates the meet-and-confer provisions (or any other provision) of the MMBA,

and we are convinced Sanders was entitled to support the CPRI (either as an individual or

through capitalizing on his office's bully pulpit) because he was not supporting the

proposal as the "governing body," which is the only entity constrained by the meet-and-

confer obligations under the MMBA.

Moreover, reliance on the City Council's inaction is incompatible with other

common law principles of ratification, which recognize that " 'ratification can be made

only in the manner that would have been necessary to confer an original authority for the

act ratified . . . .' (Civ. Code, § 2310.) Thus, where the equal dignities rule applies, it

requires formal, written ratification." (van't Rood v. County of Santa Clara (2003) 113

Cal.App.4th 549, 571; accord, John Paul Lumber Co. v. Agnew (1954) 125 Cal.App.2d

613, 622 [corporation's ratification of alleged agent's unauthorized sale of its property can

only be effected through a resolution of its board of directors when duly assembled].)

Accordingly, absent a majority vote of the elected councilmembers (City Charter, art. III,

§ 15 & art. XV, § 270(c)), it is improper to find that Sanders's support for a citizen-

sponsored initiative could convert the CPRI into a City Council-sponsored ballot

proposal under ratification principles. (Kugler, supra, 69 Cal.2d at p. 375; First Street

Plaza Partners v. City of Los Angeles, supra, 65 Cal.App.4th at p. 667 [where city charter

63

prescribes procedures for taking binding action, those requirements may not be satisfied

by implication from use of procedures different from those specified in charter]; cf. Stowe

v. Maxey (1927) 84 Cal.App. 532, 547-549 [declining to apply ratification principles to

validate act where act was one county board was incapable of delegating].)

Finally, insofar as PERB premised ratification on the City Council's placing the

CPRI on the ballot, and the City Council's acceptance of the financial benefits accruing

from its passage by the voters, we conclude that theory also lacks legal foundation. This

aspect of PERB's legal analysis rests on the unstated predicate that the City Council could

have declined to place the CPRI on the ballot or to accept the financial benefits accruing

from its passage, and that its decision to act to the contrary adopted Sanders's otherwise

unauthorized conduct by ratification. However, ratification has no application when the

principal is unable to decline the benefits of an agent's unauthorized actions. (See

generally Pacific Bone, Coal & Fertilizer Co. v. Bleakmore (1927) 81 Cal.App. 659, 664-

665.) The City Council was required by the Elections Code to place the CPRI before the

voters (without alteration) because it qualified for the ballot (cf. Blotter v. Farrell (1954)

42 Cal.2d 804, 812-813), and PERB cites no authority suggesting the City Council could

have elected to ignore the mandates of the CPRI (by refusing to accept the financial

benefits accruing from its passage) once the CPRI was approved by the voters.

Accordingly, the fact the City Council complied with its legal obligations cannot support

PERB's ratification theory.

64

D. Conclusion

We conclude, for the reasons previously explained, a city has no obligation under

the MMBA to meet and confer before placing a duly qualified citizen-sponsored initiative

on the ballot, and only owes such obligations before placing a governing-body-sponsored

ballot proposal on the ballot. We further conclude PERB's fundamental premise—that

under agency principles Sanders's support for the CPRI converted it from a citizen-

sponsored initiative on which no meet-and-confer obligations were imposed into a City

Council-sponsored ballot proposal to which section 3504.5's meet-and-confer obligations

became applicable—is legally erroneous. Because PERB's remaining determinations—

that the City Council engaged in an unfair labor practice when it defaulted on its

obligations under section 3504.5 and that PERB's "make whole" remedies for that alleged

unfair labor practice could order City to de facto refuse to comply with the CPRI—

proceeded from this fundamental but legally erroneous premise, PERB's decision must be

annulled and remanded for further proceedings consistent with the views expressed in

this opinion. (San Mateo City School Dist. v. Public Employment Relations Bd., supra,

33 Cal.3d at p. 867.)

DISPOSITION

The Public Employment Relations Board (PERB) decision is annulled, and the

matter is remanded to PERB with directions to dismiss the complaints and to order any

other appropriate relief consistent with the views expressed within this opinion. Each

party shall bear its own costs of this proceeding.

65

McCONNELL, P. J.

WE CONCUR:

HUFFMAN, J.

NARES, J.

66