Judge Mitchell L. Beckloff, Case 20STCV47465 2023-04-07 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 20STCV47465, Date: 2023-04-07 Tentative Ruling

[As an initial matter, the court acknowledges the high-quality and thoughtful briefs. They are clear, concise and well written.]

Petitioners, the Association for Los Angeles Deputy Sheriffs (ALADS) and Deputies Doe 1 through 29, seek a peremptory writ of mandate ordering Respondent, the County of Los Angeles,[1] to pay interest, including pre-judgment interest, pursuant to Civil Code section 3287, subdivision (a) on backpay awards previously ordered in various forums for the Deputies Doe.

In effort to promote judicial economy, the parties stipulated to try certain defenses asserted by the County first. Therefore, the court bifurcated the matter to try the following legal issues that might prove disposition on Petitioners’ claims. The following issues (defenses) are now before the court:

First: Does the home rule doctrine excuse the County from the application of Civil Code section 3287 thereby barring recovery of pre-judgment interest by the Deputies Doe?

Second: Is a Deputy Doe barred from seeking recovery of pre-judgment interest now if he or she failed to request pre-judgment interest during the pendency of his or her underlying matter?

Third: Is there an existing binding past practice between the County and ALADS of the County not paying pre-judgment interest on backpay awards, thereby barring recovery of pre-judgment interest by the Deputy Does under Civil Code section 3287?

The County requests judicial notice of Exhibits 1 through 8. Petitioners object to the County’s request as to Exhibits 5 through 8. Accordingly, the court takes judicial notice of Exhibits 1 through 4. As to Exhibits 5 and 6, the court takes judicial notice of the memorandum of understanding (MOU) and amendment 1 thereto only. The court does not, however, take judicial notice of any conclusion from those documents as a judicially noticeable fact. As to Exhibit 7, the fact proffered is undisputed, and therefore the court takes judicial notice of that fact. Of course, as noted by Petitioners, the remaining Deputies Doe did request the payment of interest. Finally, as to Exhibit 8, a law review article is secondary authority and the court need not take judicial notice of it. To the extent the County suggests the court should take judicial notice of the controvertible facts contained in footnote 24 of that article, the court declines to do so.

Petitioners’ evidentiary objections to the Declaration of Captain Jesus Carrasco: Objection 1 is overruled. Objection 2 is sustained as to the first and third sentences but overruled as to the second sentence.

The County’s evidentiary objections to the Declaration of Elizabeth J. Gibbons: Objections 2, 5, 8 and 9 are overruled. Objections 4, 6, 7 and 10 are sustained. Objection 1 is sustained as to the last sentence.

The County’s evidentiary objections to the Declaration of Derek Hsieh: Objections 1, 2 and 3 are overruled. Objections 5 and 6 are sustained. Objection 4 is sustained as to all except the first sentence which is overruled.

Petitioners brought this proceeding alleging Deputies Doe 1 through 29 are entitled to interest based on decisions by the Los Angeles County Civil Service Commission (Commission), the Los Angeles County Employee Relations Commission (ERCOM), and/or a superior court awarding them backpay in the context of overturned disciplinary proceedings. (First Am’d Pet., ¶¶ 18-19.)

First: Does the home rule doctrine excuse the County from the application of Civil Code section 3287 thereby barring recovery of pre-judgment interest by the Deputies Doe?

The County argues Article XI, Sections 4 of the California Constitution and the corresponding home rule doctrine provide charter counties—such as the County—with the authority to manage their own municipal affairs without state interference. The County argues this authority extends to the County’s decisions about wages and compensation paid to its employees. Such wage and compensation decisions, according to the County, includes any interest payments related to wages and compensation.

When a California county adopts a charter, its provisions “are the law of the State and have the force and effect of legislative enactments.” (Dimon v. County of Los Angeles (2008) 166 Cal.App.4th 1276, 1281; Cal. Const., art XI, § 3, subd. (a); Cal. Const., art XI, § 1, subds. (a), (b), 4.) “Under the ‘home rule’ doctrine, county charter provisions concerning the operation of the county, and specifically including the county's right to provide ‘for the number, compensation, tenure, and appointment of employees’ (that is, a county's core operations) trump conflicting state laws.” (Curcini v. County of Alameda (2008) 164 Cal.App.4th 629, 640 [citing Cal. Const., art. XI § 1, subd. (b)][underline added]; Holmgren v. County of Los Angeles (2008) 159 Cal.App.4th 593, 601.)

The County advises it addressed the specific issue of restoration of wages when employee discipline has been overturned in the Los Angeles County Code (LACC). Title 6 of the LACC addresses restoration of salary. Specifically, LACC section 6.20.100, subdivision (B) provides in part:

“In the event an employee is reduced, suspended and/or discharged, and upon appeal the civil service commission or a court having jurisdiction does not sustain such reduction, suspension and/or discharge, the employee shall be entitled to his base rate of salary, vacation and sick leave as if such unsustained reduction, suspension or discharge had not been invoked. . . .”

Based on LACC section 6.20.100, subdivision (B), the County argues its own wage restoration ordinance does not mandate the payment of interest on backpay awards. Therefore, when a County employee’s reduction, suspension and/or discharge disciplinary decision is overturned, the County is obligated only to pay the employees “base rate of salary, vacation and sick leave as if” the employee had not been reduced, suspended or discharged. (LACC, § 6.20.100, subd. (B).)

While LACC section 6.20.100, subdivision (B) does not provide for the payment of interest with a backpay award, the County concedes the ordinance does not prohibit the payment of such interest. (Opening Brief 14:19.) Thus, whether interest is awarded falls to the discretion of the administrative adjudicatory body hearing the challenge to the discipline imposed—typically, the Commission or ERCOM. (Opening Brief 14:20-21. [“Thus, the interest issue is left to the discretion of the administrative adjudicatory body . . . .”])

According to the County, as the home rule doctrine applies to the County’s decisions about wages and compensation, the County is exempt from any conflicting state law. The home rule doctrine and the primacy of municipal ordinances may only be overcome where the matter legislated is of statewide concern. (Opening Brief 14:25-28 [citing Dimon v. County of Los Angeles, supra, 166 Cal.App.4th at 1287-1289].)

“Civil Code section 3287 does not contain any wording that indicates that it must apply to internal administrative matters at the County involving employee compensation; moreover, even if it did, there is no indication that the legislature intended to address a matter of statewide concern such that it should trump local government autonomy.” (Opening Brief 15:6-9.)

“A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state.” (Emphasis added.)

As a preliminary matter, the court cannot find there is a conflict between Civil Code section 3287, subdivision (a) and LACC section 6.20.100, subdivision (B) such that the home rule doctrine is even applicable here. That is, as recognized by the County, the LACC does not prohibit an award of interest on backpay. Both the County’s ordinance and the state’s statute may be satisfied and work in harmony—complying with one does not violate the other. Given there is no conflict, the court need not address whether Civil Code section 3287 is a matter of statewide concern. (See Civic Center Assn. v. Railroad Comm. (1917) 175 Cal. 441, 445. [“With respect to matters not municipal, or municipal affairs upon which the charter [is] silent, the provisions of any general law [i.e. state statute] pertaining thereto would control the subject.”][2]

Relatedly, and as persuasively argued by Petitioner, LACC section 6.20.100, subdivision (B) and Civil Code section 3287 address different issues. Interest on an award of damages is distinct from wages and compensation. It does not follow that because interest accrues on an award of backpay (wages and compensation) that the interest is somehow transmuted into wages and compensation. (See Opposition 2:18-19.) Interest is not a wage or compensation.

Prejudgment interest is a form of damages.[3] (American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1017, 1029. [“Section 3287(a), originally adopted in 1872, allows the award of prejudgment interest as an element of damages . . . .”] See Bullis v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801, 815. [“Prejudgment interest is awarded to compensate a party for the loss of the use of his or her property.”] See also North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828; Segura v. McBride (1992) 5 Cal.App.4th 1028, 1041.)

Thus, prejudgment interest is part of the damage resulting from the wrongful withholding of wages and compensation. The interest—that damage—is not part of wages and compensation; it is distinct from it. An award of prejudgment interest is unrelated to the County’s management of its wage and compensation scheme.

The County’s reliance on the home rule doctrine to limit the damages awardable to an employee who has had disciplinary action overturned is misplaced. Charter county home

rule authority “is limited to matters concerning the structure and operation of local government . . . .” (Dibb v. County of San Diego (1994) 8 Cal.4th 1200, 1207.)

“Petitioner cannot cite to a single case that states that the home rule doctrine is preempted by Civil Code section 3287 when it is applied to the backpay of wages and/or compensation, especially as existing case law clearly holds that wages and compensation are within the authority of a charter county or city under the home rule doctrine.” (Reply 12:15-18.)

While that may be true, the converse is also true. The County has not provided a single appellate decision supporting its position prejudgment interest required by Civil Code section 3287 constitutes wages and compensation subject to the home rule doctrine.

Based on the foregoing, the court rejects the County’s defense the home rule doctrine bars the recovery of prejudgment interest by the Deputies Doe.

Second: Is a Deputy Doe barred from seeking recovery of pre-judgment interest now if he or she failed to request pre-judgment interest during the pendency of his or her underlying matter?

Petitioners have admitted that Deputies Doe 1 through 7, 11 through 14, 16, 17 and 29 “did not make any request for prejudgment interest prior to this litigation.” (County’s RJN, Ex. 7 2:19-23 [stipulation and order filed July 22, 2022].) The County contends these Deputies Doe have therefore waived any right to prejudgment interest by failing to request prejudgment interest during their administrative hearings or the superior court.

Petitioners dispute the County’s position on waiver. Petitioners assert the County has a ministerial duty pursuant to Civil Code section 3287, subdivision (a) to pay prejudgment interest on any award of backpay. (Goldfarb v. Civil Service Com. (1990) 225 Cal.App.3d 633.) Petitioner seemingly suggests the ministerial duty eliminates any requirement that there be a request for prejudgment interest.[4]

To obtain prejudgment interest under Civil Code section 3287, subdivision (a), however, there must be an affirmative request.[5] In ordinary civil litigation, some language in the complaint must request prejudgment interest to obtain such interest. At a minimum, there must be some generalized request for “such other and further relief as the Court may deem just and proper,” to allow “the court, on its own, to invoke its power to levy such prejudgment interest as it deems just and equitable.” (Segura v. McBride (1992) 5 Cal.App.4th 1028, 1041; but see North Oakland Medical Clinic v. Rogers, supra, 65 Cal.App.4th at 829 [general prayer in complaint is adequate to support award of prejudgment interest, but request should be made before judgment or in motion for new trial].)

In North Oakland Medical Clinic v. Rogers, supra, 65 Cal.App.4th at 830, the Court noted prejudgment interest is an element of damages and not a cost. Such status, according to the Court, meant “prejudgment interest should be awarded in the judgment on the basis of a specific request therefor made before entry of judgment.” (Ibid.) Thus, North Oakland Medical Clinic v. Rogers suggests to obtain prejudgment interest, there must be a timely request.[6]

The County also raises the issue of administrative exhaustion. To the extent any of the 14 Deputies Doe subject to a waiver defense proceeded through an administrative process, those Deputies Doe were required to raise the issue and exhaust it before the administrative adjudicatory body.[7] (Cf. Alameida v. State Personnel Bd. (2004) 120 Cal.App.4th 46, 53. [“[A] a defense based on a statute of limitations or other statutory time limit may, and indeed must, be raised in administrative proceedings, because the failure to raise such a defense at the administrative hearing waives the issue on review of the administrative proceedings.”])

The County requests the court rely on the admitted fact that “many of the Deputies-Doe . . . never requested pre-judgment interest during the pendency of their original underlying matters or in any subsequent judicial appeal of that underlying matter” and find waiver. (Opening Brief 18:1-9) That is, the court should find the County has a complete defense to claims raised by Deputies Doe 1 through 7, 11 through 14, 16, 17 and 29 based on their admission.

The County’s broad request is problematic in this context. “Under California law, a waiver is the intentional relinquishment or abandonment of a known right or privilege. [Citation.] Waiver is a question of fact [citation] and always is based upon intent [citation].” (Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1506.)

On the facts before it, the court cannot discern whether the admission made by those 14 Deputies Doe that they “did not make any request for prejudgment interest prior to this litigation” (County’s RJN, Ex. 7 2:19-23) means they made no request that could be interpreted as sufficient to include prejudgment interest in their damage (backpay) award. While those 14 Deputies Doe may not have expressly prayed for prejudgment interest (as suggested by Petitioners’ admission), the specific facts of each Deputy Doe may be such that some language they used during the proceeding is “sufficient for the [adjudicatory body], on its own, to invoke its power to levy such prejudgment interest as it deems just and equitable.” (Segura v. McBride, supra, 5 Cal.App.4th at 1041. See also Newby v. Vroman (1992) 11 Cal.App.4th 283, 286. [“It has long been settled that, in a contested action, prejudgment interest may be awarded even though the complaint contains no prayer for interest.”])

While waiver may operate as a defense to the claims of Deputies Doe 1 through 7, 11 through 14, 16, 17 and 29, the court cannot make that decision on this record as a matter of law. The specific circumstances of each of the disciplinary matters for Deputies Doe 1 through 7, 11 through 14, 16, 17 and 29 are required to decide whether any Deputy Doe waived any prejudgment interest to which he or she may have been entitled. The court cannot find the County’s defense dispositive without consideration of the facts specific to each of the 14 Deputies Doe.

The County asserts its binding past practice exempts it from the requirements of Civil Code section 3287, subdivision (a). The County argues applicable MOUs bargained for with ALADS contain no provision for interest on backpay awards, and the parties’ have a past labor practice of omitting interest on backpay awards unless the adjudicating body has specifically ordered such interest. That past labor practice, according to the County, is binding.

There is no dispute about the contents of the applicable MOU. It is silent on prejudgment interest and backpay awards. (First Am’d Pet., ¶¶ 16-20.) Thus, no express MOU provision is controlling.

The right to prejudgment interest arises from Civil Code section 3287, subdivision (a). (Goldfarb v. Civil Service Com., supra, 225 Cal.App.3d at 635 [“Respondent’s duty to pay interest and appellant’s right to such interest are established by section 3287, subdivision (a)”].) “[W]hen an administrative agency determines an employee's employment was wrongfully terminated, and reinstates the employee's employment with backpay, the agency must pay interest on the wrongfully withheld backpay.” (San Diego County Deputy Sheriffs Assn. v. San Diego County Sheriffs Dept., supra, 68 Cal.App.4th at 1086. See also Goldfarb v. Civil Service Com., supra, 225 Cal.App.3d at 633.)

Given the statutory entitlement to interest, the MOU’s silence on the issue cannot operate to vest discretion to make such an award in an adjudicatory body or be deemed a waiver. (See Building Material & Construction Teamsters' Union v. Farrell (1986) 41 Cal.3d 651, 667.) Petitioners’ statutory rights cannot be abridged absent a waiver or consent. That is, a silent MOU cannot override a statutory entitlement.

In the face of the MOU’s silence on the issue, the County explains the parties have a “binding past labor practice of not including interest on back pay awards unless specifically ordered to do so by the adjudicating body.” (Opening Brief 20:15-16.) The past practice, according to the County, is binding here, and precludes Petitioners from prevailing in this proceeding. Since the adjudicating bodies for the Deputies Doe did not order prejudgment interest on their backpay awards, consistent with past practice, the Deputies Doe are not entitled to prejudgment interest now.

In Riverside Sheriff's Association v. County of Riverside (2003) 106 Cal.App.4th 1285, the Court adopted the requirements for finding a binding “past practice” which had previously been established by the Public Employment Relations Board (PERB):[8]

“Neither party has cited California authority that defines what constitutes a past practice, the alteration of which requires compliance with the [Meyers Milias Brown Act (MMBA)]. Indeed, while California Courts of Appeal have held that unilateral alterations in past practices can violate the MMBA, they have not clearly stated what constitutes a past practice. (See, e.g., California State Employees' Assn. v. Public Employment Relations Bd. (1996) 51 Cal.App.4th 923, 936-937 [].) In the absence of other authority we look to the definition applied by the California Public Employment Relations Board, which has adopted the rule that ‘to be binding a past practice: [¶] . . . must be (1) unequivocal; (2) clearly enunciated and acted upon; and (3) readily ascertainable over a reasonable period of time as a fixed and established practice accepted by both parties. [Citation.] The [California Public Employment Relations] Board has . . . described a valid past practice as one that is ‘regular and consistent’ or ‘historic and accepted.’ . . .” (California State Employees Association, SEIU Local 1000 (2002) PERB Dec. No. SA-CO-237-S [26 PERC ¶ 33058, p. 18].)” (Id. at 1291.)

In support of its past practice defense, the County notes Petitioner does not allege the Deputies Does’ disciplinary proceedings occurred only recently or represent a shift from the parties’ past practices. (Opening Brief 21:20-28. [“ALDAS does not allege that these 29 cases only occurred recently or represent a shift from past practice.”])

The burden of demonstrating a binding past practice, however, is on the County. It is the County who is asserting a binding past practice operates as a defense to Petitioners’ claims. (Cf. Riverside Sheriff's Ass'n v. County of Riverside (2003) 106 Cal.App.4th 1285, 1291.)

The County’s evidentiary showing is inadequate. There is little evidentiary support for its binding past practice claim.

The County attempts to meet its burden with evidence from Captain Jesus Carrasco. Carrasco attests: “there has never been a regular, historic and accepted practice between ALADS and the County to automatically pay interest on back pay awards.”[9] (Carrasco Decl., ¶ 6.) The evidence does not provide sufficient context to allow the court to find the past practice unequivocal, clearly enunciated and acted upon, and/or readily ascertainable over a reasonable period of time.

While Carrasco’s statement may be true, it does not establish a past practice of excluding interest on an award of backpay. That there has not been an automatic payment of interest does not mean there is a past practice of not paying interest.

Accordingly, the court finds the evidence offered by the County “does not establish that such a practice was unequivocal, regular and consistent, clearly enunciated or readily ascertainable over a reasonable period of time.” (Riverside Sheriff's Assn. v. County of Riverside, supra, 106 Cal.App.4th at 1292.) The court cannot find a binding past practice precludes Petitioners from prevailing in this proceeding.

Based on the foregoing, the court finds none of the County’s defenses alleged in this bifurcated trial result in a decision in its favor. The issue of waiver for Deputies Doe 1 through 7, 11 through 14, 16, 17 and 29 may be tried on their unique facts.

[1] Petitioners brought this proceeding against both the County and its sheriff’s department.

[2] Even if an issue is municipal in nature, where the charter is silent on that issue, state law will control. (Armas v. City of Oakland (1960) 183 Cal.App.2d 137, 138-139. [“Although Oakland is a charter city, plaintiffs concede that its charter and ordinances prescribe no procedure for street closing and that thus the procedural provisions of state law must be followed, even if the function be municipal in character.”] See Hyde v. Wilde (1921) 51 Cal.App. 82, 86. [“Where no particular provisions are made covering a matter falling within the classification of a ‘municipal affair,’ the state law controls.”])

[3] The County concedes interest is an element of the damages. (Opening Brief 16:27-17:2.)

[4] Even assuming Civil Code section 3287, subdivision (a) creates a ministerial duty, that duty may not arise unless and until there has been a request for prejudgment interest. (See footnote 5 infra.) A ministerial act is one which arises “when a given state of facts exists.” (Carrancho v. California Air Resources Board (2003) 111 Cal.App.4th 1255, 1267.) “That a party is entitled to prejudgment interest does not make an award automatic (except in the case of postjudgment interest).” (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 829.)

[5] In Goldfarb v. Civil Service Com., supra, 225 Cal.App.3d at 635, the reinstated employee demanded interest from the county. The decision does not, however, describe the details of the employee’s request.

[6] The court acknowledges certain procedures in civil litigation (i.e., new trial motions) do not exist in administrative proceedings. Nonetheless, there can be no disputing ALADS’ members have many opportunities in the course of disciplinary proceedings to request prejudgment interest.

[7] “In brief, the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.” (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292.)

[8] Decisions concerning PERB are relevant and highly persuasive concerning ERCOM. (County of Los Angeles v. Los Angeles County Employee Relations Com. (2013) 56 Cal.4th 905, 917.)

[9] The court received this evidence over objection. Nonetheless, the evidence is quite conclusory and therefore not particularly persuasive.