Kopp v. Fair Political Practices Commission

KENNARD, J., Concurring and Dissenting.

I concur in the judgment.

I agree with the Chief Justice and Justices Mosk and Werdegar that this court may not issue a writ of mandate commanding *679 enforcement of Proposition 73 and that we may not reform Proposition 73 to avoid constitutional infirmity. Unlike my colleagues, however, I do not base these conclusions on a determination that Proposition 73 is not amenable to judicial reformation (although I would so determine were I to reach that question) but on the far simpler ground that we must give full faith and credit to the federal judgment that has already resolved this issue finally and conclusively.

I

On February 10, 1989, the Service Employees International Union (the Union), among others, petitioned this court for a writ of mandate to bar enforcement of Proposition 73, a campaign finance reform initiative that the voters of California had enacted on June 7, 1988, and that had become operative on January 1, 1989. In its petition, the Union named the Fair Political Practices Commission (FPPC) as the respondent; it named Senator Quentin Kopp and Assemblyman Ross Johnson, proponents of Proposition 73, as real parties in interest. The Union alleged that Proposition 73’s limitations on campaign contributions and expenditures violated the First Amendment to the United States Constitution. On March 1, 1989, this court denied the petition summarily (that is, without a written opinion or issuance of an alternative writ), thereby declining to address the constitutionality of the initiative. (Service Employees Inf l Union v. Fair Political Practices Comm., Supreme Ct. Mins., Mar. 1, 1989 [Off. Reps. Adv. Pamp. No. 9 (1989) Mins., p. II].) 1

The Union then turned to the federal courts. On March 24, 1989, it commenced an action for declaratory and injunctive relief in the United States District Court. (Service Employees Intern. Union, AFL-CIO v. FPPC (E.D.Cal. 1989) 721 F.Supp. 1172, 1173 .) Like the petition for writ of mandate previously filed with this court, the Union’s federal action challenged Proposition 73 as violating the First Amendment to the United States Constitution. The complaint named the FPPC as the defendant; Senator Kopp and Assemblyman Johnson soon intervened in the federal action as additional parties defendant. (Id. at p. 1173, fn. 2.)

*680 On May 15, 1989, the federal district court issued a preliminary injunction barring enforcement of a provision of Proposition 73 that restricted the expenditure of funds raised before January 1, 1989. (Service Employees Intern. Union, AFL-CIO v. FPPC, supra, 721 F.Supp. 1172, 1173 .) On September 14, 1989, the district court permanently enjoined the enforcement of the same provision. (Id. at p. 1180.) On September 26, 1990, the district court rendered its judgment permanently enjoining the FPPC from enforcing Proposition 73. (Service Employees v. Fair Political Practices (E.D.Cal. 1990) 747 F.Supp. 580, 593-594 .) This injunction was based on the district court’s conclusions that certain provisions of Proposition 73 violated the First Amendment to the United States Constitution and that these unconstitutional provisions could not be severed from the remainder of the initiative. (Id. at p. 590.) The FPPC, Senator Kopp, and Assemblyman Johnson appealed. (Se rvice Emp. Intern, v. Fair Political Prac. Com’n (9th Cir. 1992) 955 F.2d 1312 , 1314.)

On February 7, 1992, the Ninth Circuit Court of Appeals affirmed the district court’s judgment. (Service Emp. Intern, v. Fair Political Prac. Com’n, supra, 955 F.2d 1312 , 1323.) The federal appellate court held that Proposition 73 violated the United States Constitution insofar as it limited contributions on a fiscal year basis, banned inter- and intra-candidate transfers, and prohibited the expenditure of funds raised before January 1989. (Id. at pp. 1321-1323.) The federal appellate court also specifically addressed and rejected the argument that Proposition 73 could be “saved” by a judicial rewriting of its terms: “Were we to rewrite the statute to limit contributions on an election cycle basis, we would be at a loss to know what the dollar amounts of the limitations should be. In short, to save the statute, we would have to rewrite it substantially, ‘a practice that is decidedly disfavored.’” (Id. at p. 1321, quoting Thornburgh v. American College of Obstetricians & Gynecologists (1986) 476 U.S. 747, 764-765 [ 90 L.Ed.2d 779, 795-796 , 106 S.Ct. 2169 ].) 2

On June 29, 1992, the United States Supreme Court denied certiorari, thereby declining to review the Ninth Circuit’s decision. (California Fair *681 Political Practices Commission v. Service Employees International Union, AFL-CIO, CLC (1992) 505 U.S. 1230 [ 120 L.Ed.2d 922 , 112 S.Ct. 3056 ]; Kopp v. Service Employees International Union, AFL-CIO (1992) 505 U.S 1230 [ 120 L.Ed.2d 922 , 112 S.Ct. 3057 ].) Thus, by June 29, 1992, at the very latest, the federal judgment invalidating Proposition 73 and permanently enjoining its enforcement had become final. (See Fed. Rules App. Proc., rule 41(b), 28 U.S.C.)

On March 14, 1994, more than two years after the Ninth Circuit had issued its decision and more than eighteen months after the United States Supreme Court had declined to review that decision, Senator Kopp and Assemblyman Johnson filed with this court their present petition for a writ of mandate. The petition asks this court, essentially, to rewrite Proposition 73 to avoid the constitutional infirmities identified by the federal courts and to order the FPPC to enforce the Proposition 73 as so rewritten. On June 30, 1994, this court issued an alternative writ, thereby agreeing to give the petition full consideration and to decide it by a written opinion.

II

A state court is required to give full faith and credit to a final judgment of a federal court. (Americana Fabrics, Inc. v. L & L Textiles, Inc. (9th Cir. 1985) 754 F.2d 1524, 1529 ; Hazen Research, Inc. v. Omega Minerals, Inc. (5th Cir. 1974) 497 F.2d 151, 153, fn. 1 ; Levy v. Cohen (1977) 19 Cal.3d 165, 172-173 [ 137 Cal.Rptr. 162 , 561 P.2d 252 ] [stating that “[f]ull faith and credit must be given to a final order or judgment of a federal court”]; see 28 U.S.C. § 1738 ; Stoll v. Gottlieb (1938) 305 U.S. 165, 170-171 [ 83 L.Ed. 104, 107-108 , 59 S.Ct. 134 ]; Degnan, Federalized Res Judicata (1976) 85 Yale L.J. 741 , 744-749.) The requirement that state courts give full faith and credit to federal judgments is inherent in and essential to our federal system of government; “It would be unthinkable to suggest that state courts should be free to disregard the judgments of federal courts, given the basic requirements that state courts honor the judgments of courts in other states and that federal courts must honor state court judgments.” (18 Wright et al., Federal Practice and Procedure (1981) § 4468, pp. 648-649, fns. omitted.)

Because it is entitled to full faith and credit, “[a] federal judgment ‘has the same effect in the courts of this state as it would have in a federal court.’ ” (Younger v. Jensen (1980) 26 Cal.3d 397, 411 [ 161 Cal.Rptr. 905 , 605 P.2d 813 ], quoting Levy v. Cohen, supra, 19 Cal.3d 165,173 .) In federal courts, as in state courts, a final judgment is given preclusive effect under the doctrine of res judicata if the requirements for application of that doctrine are satisfied. (See, e.g., Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 326 *682 [ 58 L.Ed.2d 552, 559 , 99 S.Ct. 645 ]; Greater Los Angeles Coun. on Deafness v. Baldrige (9th Cir. 1987) 827 F.2d 1353, 1359-1360 .)

The doctrine of res judicata includes two distinct types of preclusion: claim preclusion and issue preclusion. (Robi v. Five Platters, Inc. (9th Cir. 1988) 838 F.2d 318 , 321.) Claim preclusion “ ‘treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same “claim” or “cause of action” ’ ” (ibid., quoting Raspar Wire Works, Inc. v. Leco Engineering & Mach. (5th Cir. 1978) 575 F.2d 530, 535 ), while issue preclusion “prevents relitigation of all ‘issues of fact or law that were actually litigated and necessarily decided’ in a prior proceeding” (838 F.2d at p. 322, quoting Segal v. American Telephone & Telegraph Co., Inc. (9th Cir. 1979) 606 F.2d 842, 845 ). Issue preclusion applies when the same issue is presented in both actions, the party to be precluded was a party to the earlier proceeding, the issue was actually decided in the earlier action after a full and fair opportunity for litigation, and the earlier action ended in a judgment that is final, valid, and on the merits. (Robi v. Five Platters, Inc., supra, at p. 322; 18 Wright et al., op. cit. supra, § 4416, pp. 137-138.) Each of these requirements is satisfied here. 3

This mandate action presents the same issue—whether Proposition 73 may be reformed to avoid constitutional infirmity—that was presented in the earlier federal action. The parties to be precluded—Senator Kopp and Assemblyman Johnson—were parties to the federal action. 4 After a full and fair opportunity for litigation, the federal courts decided that Proposition 73 may not be so reformed, and that determination has been embodied in a judgment that is final, valid, and on the merits. (Service Emp. Intern, v. Fair Political Prac. Com’n, supra, 955 F.2d 1312 .)

My colleagues do not dispute that the usual requirements for issue preclusion are present; instead, they apply the “public interest” exception to issue and claim preclusion as articulated in decisions of this court. (Lead opn., ante, at p. 621; conc. & dis. opn. of Baxter, J., post, at p. 686.) But when a federal court is exercising federal question jurisdiction, as the federal courts *683 did when they determined that Proposition 73 violated the federal Constitution, the preclusive effect of the federal judgment in later state proceedings is measured by federal rather than state law. (Hagen v. Utah (1994) 510 U.S. 399 , _ [ 127 L.Ed.2d 252, 263-264 , 114 S.Ct. 958, 964 ]; Martin v. Martin (1970) 2 Cal.3d 752, 761 [ 87 Cal.Rptr. 526 , 470 P.2d 662 ]; Rest.2d Judgments, § 87, p. 314.) 5

Federal law does not recognize a broad “public interest” exception to issue preclusion. In Federated Department Stores, Inc. v. Moitie (1981) 452 U.S. 394, 401 [ 69 L.Ed.2d 103, 110-111 , 101 S.Ct. 2424 ], the United States Supreme Court stated: “There is simply ‘no principle of law or equity which sanctions the rejection by a federal court of the salutary principle of res judicata.' [Citation.] The Court of Appeals’ reliance on ‘public policy’ is similarly misplaced. This court has long recognized that ‘[pjublic policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties.’ [Citation].”

Federal courts have construed this statement by the United States Supreme Court to mean that there is no “public interest” or “public policy” exception to res judicata under federal law. (Baptiste v. C.I.R. (8th Cir. 1994) 29 F.3d 433, 436 ; Repola v. Morbark Industries, Inc. (3d Cir. 1992) 980 F.2d 938, 943 ; Smith v. Woodstock, Inc. (N.D.Ill. 1981) 521 F.Supp. 1263, 1265 .) Even assuming that some narrow “public interest” exception survives under federal law, it does not apply here.

The public interest in this case supports, not defeats, issue preclusion. There is a strong public interest in the finality of judgments and preventing relitigation. (Federated Department Stores, Inc. v. Moitie, supra, 452 U.S. *684 394, 401 [ 69 L.Ed.2d 103, 110-111 ].) There is an additional and equally strong public interest in ensuring that state courts respect and honor federal judgments, a public interest that is embodied in the doctrine of comity 6 and in the requirement that state courts give full faith and credit to the judgments of federal courts. The combined weight of these interests far outweighs any benefits to be derived from judicial reformation of a facially unconstitutional law, even assuming that the law were amenable to such reformation.

Moreover, even under state law the “public interest” exception is invoked only in exceptional circumstances when it may be necessary to relieve a public agency of an erroneous earlier determination of the issue. (Arcadia Unified School Dist. v. State Dept, of Education (1992) 2 Cal.4th 251, 259 [ 5 Cal.Rptr.2d 545 , 825 P.2d 438 ]; City of Sacramento v. State of California (1990) 50 Cal.3d 51, 64-65 [ 266 Cal.Rptr. 139 , 785 P.2d 522 ].) Here, the Chief Justice and Justices Mosk and Werdegar conclude that the federal courts resolved the issue correctly when the Ninth Circuit decided that Proposition 73 is not amenable to judicial reformation to avoid constitutional infirmity. (Lead opn., ante, at pp. 664-670; conc. opn. of Mosk, J., ante, at p. 671.) This conclusion that the earlier determination was correct defeats application of the “public interest” exception. 7

Ill

“The resolution of this dispute does not go to the substantive merits of the controversy, but it goes directly to basic jurisdictional powers of courts of separate sovereignties.” (Del. Valley Citizens’ Council v. Com. of Pa. (3d Cir. 1985) 755 F.2d 38, 44 .)

*685 Since its enactment in June 1988, Proposition 73 has been repeatedly addressed by both the state and federal judiciary. This is the third opinion from this court concerning the initiative, which has also been the subject of extended and complex federal judicial proceedings. Those federal proceedings have now run their course and the issues presented therein have been adjudicated on the merits and embodied in a federal judgment that is now final.

By the various opinions filed today, this court has decided that it has the power to redetermine an issue finally resolved by this federal judgment— whether Proposition 73 may be reformed to avoid constitutional infirmity— and to issue a writ ordering enforcement of Proposition 73 despite the federal judgment permanently enjoining enforcement of that same law. (Lead opn., ante, at pp. 620-625; conc. & dis. opn. of Baxter, J., post, this page.) Three justices (Justices Arabian, Baxter, and George) would actually issue the writ; three others, although proclaiming that this court has the power to do so, are of the view that the writ should not issue because Proposition 73 is not amenable to judicial reformation (the Chief Justice and Justice Werdegar), or because this court has no power, absent authorization by the Legislature, to reform a legislative act (Justice Mosk). (Lead opn., ante, at pp. 664-670; conc. opn. of Mosk, J., ante, at pp. 671, 674.)

For the reasons explained above, I do not agree that a state court is at liberty to disregard a federal judgment enjoining enforcement of a state law on federal constitutional grounds simply because the state court may disagree with the federal courts’ conclusion that the law is not amenable to reformation. A state court must give full faith and credit to the final judgment of a federal court by precluding parties from relitigating issues that were fully and fairly litigated and necessarily determined in the federal action. I would do so here.

When this court refused to consider the Union’s constitutional challenge to Proposition 73, we were in the process of determining whether Proposition 73 superseded every provision of Proposition 68, which was another campaign financing reform initiative that the voters enacted at the June 1988 election, or only those provisions of Proposition 68 that actually conflicted with Proposition 73. A majority of this court ultimately concluded that Proposition 73 entirely superseded Proposition 68. (Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Com. (1990) 51 Cal.3d 744 [ 274 Cal.Rptr. 787 , 799 P.2d 1220 ].) I dissented, concluding that the majority had misconstrued article II, section 10, subdivision (b), of the California Constitution, which requires that the provisions of simultaneously enacted initiatives be reconciled to the greatest possible extent. ( 51 Cal.3d at p. 774 (dis. opn. of Kennard, J.).)

After the Ninth Circuit Court of Appeals rendered this decision, California Common Cause, among others, filed an original mandamus proceeding in this court, in which it contended that the federal courts’ invalidation of Proposition 73 revived Proposition 68 by-operation of law. (Gerken v. Fair Political Practices Com. (1993) 6 Cal.4th 707, 710 [ 25 Cal.Rptr.2d 449 , 863 P.2d 694 ].) Proposition 68, like Proposition 73, had been enacted by a majority of the voters. (See fn. 1, ante.) This court agreed to address the argument when it issued an alternative writ. Thereafter, a majority of this court, fully aware of the federal decision invalidating Proposition 73 (Gerken v. Fair Political Practices Com., supra, at pp. 710, 712), decided that Proposition 68 “remains inoperative.” (Id. at pp. 711 (lead opn. of Lucas, C. J.), 724 (cone. opn. of Baxter, J.).) I joined Justice Arabian’s dissenting opinion, which concluded that Proposition 68 took effect once Proposition 73 had been ruled unconstitutional and its enforcement enjoined. (Id. at p. 724 (dis. opn. of Arabian, J.).)

Because the requirement for issue preclusion are clearly met, I do not address whether the requirements for claim preclusion are also satisfied.

Issue preclusion is not barred by the presence of California Common Cause in this action as an additional party plaintiff. California Common Cause was a party to both Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Com., supra, 51 Cal.3d 744 , and Gerken v. Fair Political Practices Com., supra, 6 Cal.4th 707 , and it had ample notice of and opportunity to intervene in the federal action. It became a party to this proceeding only because this court permitted it to intervene after we had issued the alternative writ. To allow its presence in the action to defeat issue preclusion would encourage parties to evade the preclusive effects of final judgments by the simple expedient of adding additional parties to the later action.

The Chief Justice’s opinion asserts that state law governs when a state court is considering whether an exception to res judicata or collateral estoppel applies to a federal judgment. (Lead opn., ante, at p. 622, fn. 16.) Not so. As the Restatement Second of Judgments, section 87 states: “Federal law determines the effects under the rules of res judicata of a judgment of a federal court.” (Rest.2d Judgments, § 87, p. 314.)

The Chief Justice’s opinion also maintains that the United States Supreme Court’s decision in Dombrowski v. Pfister (1965) 380 U.S. 479, 491-492 [ 14 L.Ed.2d 22, 31-32 , 85 S.Ct. 1116 ] recognized that a state court may “reform” a state statute following a federal court’s decision. (Lead opn., ante, at p. 622, fn. 16.) I do not read Dombrowski as removing any limitations on this court’s authority to undermine final federal decisions through the guise of “reformation” or otherwise. Dombrowski is readily distinguishable. That case involved the use of threats to enforce, without any expectation of securing convictions, an overbroad statute that impaired freedom of expression. ( 380 U.S. at p. 482 [ 14 L.Ed.2d at p. 26 ].) The high court did not there address the question of whether the statute could be narrowed by construction. {Id. at p. 491 [ 14 L.Ed.2d at p. 31 ].) Nothing in Dombrowski suggests that the court intended to reject the principle that the res judicata effect of a judgment of a federal court is governed by federal law.

“The forbearance which courts of co-ordinate jurisdiction, administered under a single system, exercise towards each other, whereby conflicts are avoided, by avoiding interference with the process of each other, is a principle of comity, with perhaps no higher sanction than the utility which comes from concord; but between State courts and those of the United States, it is something more. It is a principle of right and of law, and therefore, of necessity.” (Covell v. Heyman (1884) 111 U.S. 176, 182 [ 28 L.Ed. 390, 392-393 , 4 S.Ct. 355 ].)

I do not agree with the Chief Justice’s apparent suggestion that the public interest exception to the doctrine of res judicata may be applied whenever a majority of the court decides that further litigation should be permitted. (Lead opn., ante, at pp. 622-623, fn. 16.) Both Arcadia Unified School Dist. v. State Dept, of Education, supra, 2 Cal.4th 251 , and City of Sacramento v. State of California, supra, 50 Cal.3d 51 , corrected erroneous prior state court decisions involving public agencies. As this court stated in Arcadia Unified School Dist. v. State Dept, of Education, supra, at page 259: “The public interest exception is an extremely narrow one; we emphasize that it is the exception, not the rule, and is only to be applied in exceptional circumstances.” I am therefore of the view that the public interest exception requires more than merely a disagreement with another court’s prior decision.

Nor do I agree with the Chief Justice that the propriety of the prior decision is irrelevant to the determination of whether the public interest exception should be invoked. That approach would allow the judiciary to relitigate matters already finally determined, without consideration of whether such relitigation is either necessary or appropriate. I would accord more respect to matters that have already been fully and fairly litigated.