City & County of San Francisco v. Boyd

EDMONDS, J., Dissenting.

I cannot join in a decision which, in my opinion, upholds an ordinance authorizing the payment of wages concededly larger than the highest amounts for like services paid elsewhere in the state, in defiance of express provisions of the city’s charter.

In September, 1942, the Board of Supervisors of San Francisco ordered a proposed amendment to section 151 of the charter submitted to a vote of the people. Pursuant to the provisions of section 183 of the charter, the board then authorized the mailing of a statement to the voters under the heading: “Standardize Municipal Salaries In Accord With Private Employments. Vote Yes.” The reasons for approving the proposed amendment were summarized as follows:

“It provides that municipal salaries shall be in accord with the general prevailing rate in private or other governmental organizations.
“It provides for all employees instead of a favored few.
“It provides for a minimum salary of $106 per month for a full time employee.
“It provides for periodic surveys to keep schedules in line with private employment.”
In conclusion the statement added: “We must end favoritism in municipal salaries. We must put municipal and private salaries in accord.”

The new section was adopted at the November election, and ratified by the Legislature of 1943.

Prior to its amendment, section 151 provided that compen*697sations to be standardized “shall be not higher than prevailing rates for like services and working conditions in private employment or in other comparable governmental organizations in this state.” By the amendment, the words “shall be in accord with” were substituted for “shall be not higher than.” The reason for the change is clear. Before the amendment was adopted, the municipal employee had no assurance that he should receive the generally prevailing wage, for the charter only fixed a maximum limitation beyond which his compensation could not go. The amendment retains the limitation but also declares that the employee shall receive the generally prevailing wage, which is a fair and practical standard from the standpoint of both the employee and the taxpayer.

That this is the proper construction of the amendment clearly appears from the argument sent to the voters. Implicit in the statements that the proposed amendment “Provides for all employees instead of a favored few” and that “We must end favoritism in municipal salaries—we must put municipal and private salaries in accord,” is the fact that under the provision then existing, prescribing only a maximum limitation upon the compensations of the city’s employees, only those in a few classifications were receiving that wage and that they were the “favored few” with whom the salaries of the other municipal employees should be equalized. Thus the people, in voting for the charter amendment, were informed not only upon the authority of the board of supervisors, which had placed the measure upon the ballot “with favorable recommendation,” but also by the wording of the proposed amendment, that the municipal salaries would be not higher nor lower than, but “in accord with” the rates prevailing in private employment, thereby enabling the city’s employees to obtain the same compensation as the sometimes more-favored privately-employed workers performing the same duties.

There is nothing in either the amendment, or the reasons advanced in favor of its adoption, to indicate that the purpose of the new provision is to give the employee in public service an advantage over those privately employed, or to authorize the payment of a larger wage than the highest paid by any other employer in the state. The only authority which the board has to fix a rate of compensation higher than that prevailing in comparable employment is to provide a minimum *698wage in the municipal service of $106 per month. And the provision of the proposed amendment in this regard was one of the points emphasized in the statement to the voters. With the exception of this minimum standard, not only would the allowance to the municipal employee of a greater wage than that generally prevailing violate the limitation usually found in municipal charters that the taxpayer shall pay no more than private industry for the services of its employees, but it would also be contrary to the procedure of the proposed amendment, which, as construed by the statement to the voters, “provides for periodic surveys to keep schedules in line with private employment. ’ ’ And a court, in interpreting a charter provision adopted by the voters, should give it a construction consistent with the general and customary understanding of the words used. .

Certainly the amendment was not adopted for the immediate benefit of the municipal street ear employees, for they, at the time of the election, were included in the “favored few” who were already receiving the highest wage then prevailing for like services paid by any street car operator in the state. In fact, it may fairly be said that the salaries which they were receiving, prior to the adoption of the amendment, were being paid in violation of the charter. For from the stipulated facts in this case, it appears that, in recommending rates to be paid the motormen and conductors of the municipal railway for the fiscal year 1942-43, the Civil Service Commission knowingly acted contrary to the plain limitation of the city charter with the acknowledged purpose of avoiding labor difficulties, as it justified increasing the rates of these employees to amounts larger than the highest paid elsewhere in the state for like services, upon the ground “that disruption of transportation service would interfere with production of vital war industries and would also seriously inconvenience a large portion of the population of the community.” And as a further reason for its action, said the commission, it “is of the opinion that when the provisions of Section 151 of the charter were drafted by the freeholders and subsequently adopted by the people, they could not know of the problems that would be created by the war conditions which we now face.” However, the commission concluded, its action “shall not be considered or construed in any sense as a precedent in future cases.”

Yet despite the clear purport of the amendment to correct inequalities existing because most municipal employees were *699receiving less than the rates prevailing for like services in private employment and other governmental organizations, a majority of this court construe the amendment as authorizing a still higher rate of compensation for the “favored few” already receiving the highest prevailing rate, and declare that, because of it, the board of supervisors may now fix a wage “higher than the generally prevailing rates.” I submit that their conclusion in this regard, and as applied to the facts of this action, is not justified in law or in fact.

The case is decided upon these two issues: (1) Are the compensations fixed in the schedule adopted by the board of supervisors “in accord with the generally prevailing rates of wages for like service and working conditions in private employment or in other comparable governmental organizations in this state”; and (2) if so, did the failure of the Civil Service Commission to follow the requirements of the charter in establishing its recommended schedule of compensations render the ordinance invalid?

It is conceded that the charter provision requiring the compensation schedule to be “in accord with the generally prevailing rates of wages” is mandatory and that if the compensations for the municipal railway employees established by the ordinance under consideration are not so in accord, the ordinance is void. And the majority opinion admits that ‘ ‘ The evidence discloses that the generally prevailing rates of compensation are somewhere between 70c and 93^0 an hour, the minimum and maximum rates paid by other transportation systems in the state. ” (Italics added.) It also states that the rates fixed by the board of supervisors range from 85c to 97%c an hour, but does not break down these figures to reveal the fact that the proposed municipal wage is five cents higher than the highest amount paid by any other operator of street railway service in the state for comparable classifications of employees.

Is, then, a wage which is five cents an hour higher than the highest wage paid by any private corporation whose schedule is included in the survey relied upon by the commission, or which is five cents an hour lower than the lowest wage shown, “in accord with” the prevailing wage for such services? The definitions of “accordance” in Webster’s International Dictionary and in Black’s Law Dictionary, are quoted in the majority opinion as meaning in “agreement; harmony; concord; conformity.” But the majority opinion’s addition *700of the word “substantially,” when speaking of the measure of conformity required by the charter, is an acknowledgment that its conclusion cannot rest upon the language of that instrument. To so qualify the people’s requirement in this regard is judicial legislation in its plainest form.

The majority opinion reaches its conclusion as to the validity of the rates by treating the question as one within the range of legislative discretion. The legislative determination of what is “in accord with” the prevailing wage is one which will be disturbed, says the majority opinion, only upon a showing of an abuse of authority by the legislative body. “The courts,” it states, “will not interfere with that determination unless the action is fraudulent or so palpably unreasonable and arbitrary as to indicate an abuse of discretion as a matter of law.” Such a rule would be applicable if the only duty of the commission and the board of supervisors were to fix a “reasonable” salary. (See Graves v. Paducah, 28 Ky.L.Rep. 576 [89 S.W. 708].) But the charter provision establishes a definite standard for legislative and administrative action.

None of the authorities in the majority opinion sustains the rule for which it is cited. Thus in Mann v. Tracy, 185 Cal. 272 [196 P. 484], the petitioner attacked a ruling of the Civil Service Commission, made prior to the giving of an examination, which limited to three years the maximum period during which an eligible list should remain effective. The court found no charter limitation preventing such action, and based a decision upholding the action upon a charter provision allowing the commissioners to strike the name of a candidate from the list after it had been there for more than two years. And in Hannon v. Madden, 214 Cal. 251 [5 P.2d 4], the court considered the determination of a city council upon the question of a contractor’s compliance with a street improvement contract. Not only was there no standard or limitation provided by the charter or constitution, but a state law then provided that “All decisions and determinations of said city council . . . shall be final and conclusive.” Under such a statute, said the court, the decision of the council upon “such nonjurisdictional matters as the failure of the work to comply with the contract cannot be urged in a court action as grounds for invalidating the assessment,” and it “may be attacked in a legal proceeding only upon pleading and proof that the board acted fraudulently or that its action is so palpably unreasonable and *701arbitrary as to raise an inference of plain abuse of discretion as a matter of law.”

In the only other ease cited by the majority opinion to support its statement, the action questioned was the wisdom of the city in entering into a contract with the county of Alameda for the latter’s care of the former’s tubercular patients. The court emphasized the fact that no charter provision or statute limited the right to make such a contract. On the contrary, said the court, ‘ ‘ ‘ The law casts upon the board the duty of determining whether in its judgment the public necessity required the county to acquire a new hospital and conferred upon it the power necessary to accomplish this if it should so determine. . . . Whether in the exercise of legislative powers the board acts wisely or unwisely is no concern of the courts. ’ ” In the absence of a showing of want of jurisdiction or of bad faith, the court continued, it would not inquire into the question of whether the city had made a good or a bad bargain. (In re City and County of San Francisco, 191 Cal. 172, 184, 185 [215 P. 549].)

Unlike the present action where the charter clearly establishes a definite standard for the legislative and administrative action, in all three of these cases there was no constitutional or charter limitation or standard governing or limiting the exercise of the area of discretion involved. And in the section of McQuillin on Municipal Corporations, cited by the majority opinion, appears the following statement of the principle : “If the salary is fixed by the proper authority and in the manner prescribed, the general rule is that the courts will not interfere. . . . Usually the council or governing legislative body is given power to fix salaries of municipal officers and employees, which is done generally by ordinance (a legislative act) and not by mere resolution. Ordinances providing for salaries must conform with charter and statutory provisions, and cannot provide a salary less or greater than that fixed by the charter or statutes. . . . Where a salary is to be fixed by an officer or board it is an administrative act and need not be fixed by ordinance.” (2 McQuillin on Municipal Corporations [2d ed. 1939], sec. 535, pp. 303-306.)

The charter of a municipality is its constitution and to be valid, an ordinance must harmonize with its provisions. (Marculescu v. City Planning Com., 7 Cal.App.2d 371, 373 [46 P.2d 308]; In re Pfahler, 150 Cal. 71, 82 [88 P. 270, 11 Ann.Cas. 911, 11 L.R.A.N.S. 1092]; Platt v. San Francisco, *702158 Cal. 74, 84 [110 P. 304]; South Pasadena v. [Los Angeles] Terminal Ry. Co., 109 Cal. 315, 321 [41 P. 1093].) As has been, aptly stated, “An ordinance can no more change or limit the effect of the charter than a statute can modify or supersede a provision of the state Constitution.” (Marculescu v. City Planning Com., supra, p. 373.) And, in considering a question arising under the San Francisco Charter, this court recently said that “the provisions of the charter . . . must control the actions of the Board of Supervisors and the Civil Service Commission in determining the salary to be received” by certain municipal employees. (Banks v. Civil Service Com., 10 Cal.2d 435, 438 [74 P,2d 741].)

Under the provisions of the charter, the “legislative” action of the board of supervisors is predicated upon prior administrative action by the Civil Service Commission, and although the procedure established by the charter is culminated by the “legislative” act of passing an ordinance, the basic steps in adopting the ordinance are what would generally be called “administrative” in character. In this respect the adoption of the standardization ordinance is unlike the determination of fact implicit in the action of a state legislature or the federal Congress (see People v. Western Fruit Growers, ante, p. 494, 507 [140 P.2d 13]), but is comparable to that of legislative and administrative agencies. And it is a rule of universal application that one adversely affected by such action is entitled to a judicial determination as to whether any facts exist to support the administrative determination. (South Chicago Coal & Dock Co. v. Bassett, 309 U.S. 251, 257, 258 [60 S.Ct. 544, 84 L.Ed. 732]; Interstate Commerce Com. v. Union Pac. R. Co., 222 U.S. 541, 547, 548 [32 S.Ct. 108, 56 L.Ed. 308]; Northern Pac. R. Co. v. Dept. of Public Works, 268 U.S. 39, 44, 45 [45 S.Ct. 412, 69 L.Ed. 837]; Booth Fisheries Co. v. Industrial Com. of Wisconsin, 271 U.S. 208, 209, 210 [46 S.Ct. 491, 70 L.Ed. 908].)

Obviously wide latitude must be allowed the commission in determining what is the “generally prevailing” wage within the limitations of the highest and lowest amounts paid by any other employer. But when the commission has obtained data showing the highest wage paid, there is no basis for saying that any greater sum is “prevailing” and the range of discretion is at an end; no wage exists with which the municipal rate may be “in agreement” or “conformity.” Consequently no data before the commission supports the rates arrived at by it and adopted by the board of supervisors. *703For a majority of this court to refuse to enforce the plain language of the charter in deference to a determination unsupported by any evidence is, to me, indication of an unwillingness to check violation of constitutional or charter provisions. In my opinion, the use of the phrase, “legislative discretion,” as applied to the facts of this case, is but an instrument of judicial self-abnegation for the avoidance of a constitutional function.

And if the decision of the majority of this court is, in reality, based upon the principle that a five-cent deviation above the charter limitation comes within the principle of de minimis non curat lex, I must again disagree. For I am sure that the public employee would consider the payment of a wage of five cents an hour less than the lowest paid elsewhere in the state to be of definite importance to his standard of living. Nor is an excessive wage of five cents an hour a matter too small for judicial concern in the consideration of a salary standardization ordinance fixing compensation in an aggregate amount of $20,000,000 for a single fiscal year.

In addition, the interpretation of the majority opinion renders useless the charter provision as a standard which either the employee or the taxpayer may enforce. For by what rule is the reviewing court to decide that a compensation of 10, 15, 25 cents or more per hour higher than the highest, or lower than the lowest, wages paid for like services in private employment is either within or without the permitted administrative and legislative discretion? Can it be fairly said that such a result was contemplated or intended by the people in adopting the charter provision?

A consideration of the second issue serves only to emphasize the accuracy of my conclusion that the compensations established by the ordinance are not and were not intended to be “in accord with” the generally prevailing rate. The basic limitation upon the action of the commission in drafting a proposed schedule is that its recommendations must be made “solely on the basis of facts and data obtained in a comprehensive investigation and survey concerning wages paid in private employment for like service and working conditions or in other governmental organizations in this state.” To insure that the commission’s consideration be confined to such data, the charter commands, first, that it “shall set forth in the official records of its proceedings all of the data thus obtained.” Secondly, the section requires that “on the basis of *704such data the commission shall set forth in its official records an order malting its findings as to what is the generally prevailing rate of pay for each class of employment in the municipal service.” Finally, it “shall recommend a rate of pay for each such classification in accordance therewith. (Italics added.)

The obvious purpose of these limitations is to prevent such an administrative determination as is now before this court for review. The charter carefully delineates the scope of the discretion which the commission may exercise, and limits a determination by the data, and only the data, of wages paid by other employers which were before it for consideration. And to safeguard the interests of the municipal employee and also of the taxpayer, the charter requires the commission to include in the record of its action both the data considered and the findings made upon it.

In excusing compliance with the charter provisions, the city attorney insists that the word “shall” is not always to be construed as mandatory, and although ordinarily having that meaning, as here used should be held to be directory only. Under some circumstances, such a construction is permissible, but the test is whether the requirement is of such importance and materiality to the purpose of the statute being considered as reasonably to permit the conclusion that the Legislature intended to allow action to be taken only upon compliance with the specified procedure. In this connection a court should consider whether an undue advantage is gained from failure to follow the steps outlined or a benefit to the public or to an individual is impaired or lost by the failure to do so. (See Cake v. City of Los Angeles, 164 Cal. 705, 710 [130 P. 723].)

Applying these tests to the procedural requirements of section 151, supra, it is clear that each is material to the admittedly mandatory provision requiring the compensation to be in accord with the prevailing rates of wages for similar service. Their importance in confining the action of the commission to tangible data and in establishing a clear record of the basis of that body’s determination, unquestionably operates to the advantage of both the public and the affected employee, for it affords those interested a satisfactory means of challenging any asserted departure from the standard set by the charter, both before the board of supervisors, and in any judicial review of the action taken. The word “shall” there*705fore should be given its normal connotation, and the procedural requirements interpreted as mandatory.

The majority opinion recognizes that, as stipulated by the parties, the commission did not comply either with the requirement that it set forth in the official records of its proceedings all of the data obtained in its investigation, or with the requirement that it set forth therein “an order making its findings” as to the generally prevailing rates. Moreover, the record of the commission shows that its recommendation was not based “solely” upon the data which it considered. For none of those data included a rate comparable to the ones contained in the proposed schedule. In addition, the majority opinion admits, the commission based the schedule of rates, at least in part, “on changed economic conditions resulting in an increased cost of living.” This statement conforms to the agreement of the parties that the commission, as a basis for its recommendation, “took into consideration the fact that since July 1, 1942, economic conditions had changed and the cost of living had increased.” Yet the charter authorizes the commission or the board of supervisors to consider changed economic conditions only for the purpose of determining whether a new survey is necessary to make certain that compensation paid the municipal employees is still in accord with that prevailing for like service elsewhere in the state, and not as a factual basis for the computation of new rates. (Sec. 151, as amended.)

Thus it appears that the commission complied with none of the three major procedural requirements for a determination of recommended compensation. Yet despite this fact, and the admissions of noncompliance implicit in the opinion of the Chief Justice and in the agreed statement of facts, it is decided that the action of the commission “constituted a substantial compliance . . . with the procedural steps enumerated in section 151.” And the discussion in the majority opinion, upon which this conclusion is predicated, is too general and ambiguous for a clear understanding of the measure of compliance by the commission with the requirements.

The stipulation of facts shows that the only data concerning the rates of wages paid by other street railway operators in the state, which were considered by the commission in recommending the proposed schedule, were set forth in a schedule prepared by the Public Administration Service, a nonprofit organization of Chicago. This schedule lists the 19 *706California communities in which street cars or buses are operated and the minimum and maximum rates paid by each operator. Neither this schedule nor the data contained therein was placed in the official records of the commission.

The only schedule which the commission did include in its official records was one entitled “Summary of Wage Recommendations and Supporting Data. ’ ’ Except for the then current San Francisco Municipal Railway rates, this summary does not purport to contain or identify the rates of any employer, public or private, nor can it be determined from the summary what rate of pay was being paid to any particular class of employee by any employer other than the city and county of San Francisco. Unquestionably, the summary does not contain “all of the data” on the subject of the compensations here involved which were obtained and used by the commission and which the charter requires should be set forth in its official records. This is further emphasized by the fact that in the summary under the heading “Appropriate Prevailing Rates” are set forth rates for each of .the four classes of employees included in the commission’s recommendation, ranging from 80c to 87%c per hour. There is no means whatever, based on examining the summary alone, of determining how such “Appropriate Prevailing Rates” were arrived at, thus demonstrating that they are based on underlying data not set forth in the summary or in the official records of the commission’s proceedings.

And not even a suggestion appears in the stipulated record that the schedule containing the factual data used by the commission was available to public examination in even unofficial form or that the commission purported to make an order including its finding as to the prevailing wage rate. Under such circumstances, I see no basis in fact for the conclusion of the majority opinion that “These schedules reflected the findings of the commission with respect to prevailing wages and constituted a substantial compliance by the civil service commission with the procedural steps” of the charter.

Nor may the result reached in the majority opinion be justified by its statement that “the rates of compensation are fixed by an act of the board of supervisors and involve an exercise of the independent judgment of that body.” For the determination of the board, as well as the commission, is confined to data which have been considered by the commission, and the same limitations apply to the area of discretion *707it may exercise. Section 151, supra, provides that “the civil service commission shall prepare and submit to the board of supervisors and the board shall adopt” the schedule of compensations. The board of supervisors can only adopt a schedule of compensations “in accord with the generally prevailing rates of wages” for like services. The schedules recommended by the commission “shall be transmitted to the board of supervisors together with the compilation of a summary of the data obtained and considered by the civil service commission and a comparison showing existing schedules.” In addition, the charter requires that, “before making any amendment” to the schedule of compensations recommended by the commission, “the data considered by the board of supervisors shall be transmitted to the civil service commission for review and analysis.” Such provisions clearly show that the board, in adopting the schedule, is limited to specific data considered by the commission, and that the board’s determination, as well as the commission’s, must also be supported by such evidence.

If democracy is to continue to mean a government of law, then, as was said at an earlier time, “no argument of hardship will justify a court in setting at naught the written terms of a city’s charter, even at the instance of the city’s officials.” (San Christina Investment Co. v. San Francisco, 167 Cal. 762 [141 P. 384, 52 L.R.A.N.S. 676].) And, as I pointed out in City and County of San Francisco v. Linares, 16 Cal.2d 441, 448 [106 P.2d 639], certainly this should not be done in a suit between the city and one of its administrative officers, for it allows a question of public interest to be conclusively decided in a proceeding which is not brought in such form as to allow a full and fair judicial examination of the merits of the controversy. Especially is this true where, as in the present proceeding, the city officials, purportedly adverse to one.another on the issues presented, have waived in advance the right to apply for a rehearing. Moreover, the city attorney has admitted that the board of supervisors appropriated the money to pay the fees of counsel who are appearing for the respondent city controller. The United States Supreme Court very recently dismissed an action instituted as a “friendly suit.” Characterizing it as collusive, the court said: “Even in a litigation where only private rights are involved, the judgment will not be allowed to stand where one of the parties has dominated the conduct of the *708suit by payment of the fees of both. ’ ’ (United States v. Johnson, 319 U.S. 302 [63 S.Ct. 1075, 87 L.Ed.-].)

Por these reasons, in my opinion, the writ of mandate should be denied.