Concurring and Dissenting.—Though I concur in the ultimate result reached by the majority, I must dissent from the reasoning of the opinion. I am sympathetic to the desires of superior court judges to keep their dockets free of cases that should properly be before the municipal courts. I am not persuaded, however, that Code of Civil Procedure section 3961 was intended to or can properly be interpreted to authorize a superior court judge to transfer a case in which the complaint in good faith alleges damages greater than the jurisdictional minimum of the superior court.
I.
The jurisdictional regime in force before section 396 was enacted squarely rejected the “true value of the case” test, which allowed courts to determine an amount in controversy in a case notwithstanding the amount stated in the demand. (See Dashiell v. Slingerland (1882) 60 Cal. 653, 656-657.) Indeed, once jurisdiction was established, it could not be divested: “Jurisdiction of the cause attaches at the time of the commencement of the action, and cannot be divested by the establishment to the satisfaction of the court of a defense to the whole or any portion of the claim, whether by demurrer, or by evidence on the trial.” (Gardiner v. Royer (1914) 167 Cal. 238, 244 [139 P. 75] (hereafter Gardiner).)
In Greenbaum v. Martinez (1890) 86 Cal. 459 [25 P. 12] (hereafter Greenbaum), the plaintiff demanded an amount less than the jurisdictional minimum for the wrongful conversion of some wheat, but by alleging costs plaintiff was able to bring the total demand to an amount greater than the jurisdictional minimum. (Id. at p. 460.) We rejected the defendant’s argument that the superior court was jurisdictionally precluded from hearing the case because the demand, exclusive of costs, failed to satisfy the jurisdictional minimum. (Id. at p. 463.)
We noted that costs of recovery were properly included in the demand, and that the amount demanded, “according to the settled rule in this state, constitutes the test of jurisdiction. [Citations.]” (Greenbaum, supra, 86 Cal. at p.461.) With regard to the defendant’s observation that this “settled rule” encouraged plaintiffs to inflate their demands to establish jurisdiction *275in superior court, we responded: “While this may occur, yet the inevitable consequence of not being able to recover the jurisdictional sum, so as to carry costs under section 1022 of the Code of Civil Procedure, will, we apprehend, be sufficient to prevent such a practice from becoming common; and the saving of costs will compensate the defendants in the rare instances in which they may be first brought into the superior instead of the justice’s court.” (Ibid.) The holding of Greenbaum that the demand determines jurisdiction was reiterated in numerous cases in the succeeding decades (see, e.g., Gardiner, supra, 167 Cal. 238; Rodley v. Curry (1898) 120 Cal. 541 [52 P. 999]; Hall v. Cline (1920) 45 Cal.App. 616 [188 P. 295]; Sunset Lumber Co. v. Dunlap (1917) 32 Cal.App. 492 [163 P. 338]); its observation, that a denial of costs was the appropriate sanction to deter inflated demands, was eminently supported in statute.
Thus, prior to the enactment of section 396 in 1933, the cases agreed that the verified pleadings determined jurisdiction. Section 396 did not change this principle. A plaintiff was required to allege damages of at least the jurisdictional minimum to establish the superior court’s “competence” to hear a case. Once this threshold criterion was fulfilled the superior court was compelled to hear the case. At the time section 396 was added, as in 1890 and today, inflated demands were discouraged through the denial of costs to the prevailing plaintiff.2 Indeed, the fifth paragraph of section 396,3 by ensuring that the superior court may maintain jurisdiction even if it becomes evident that the plaintiff will not recover the jurisdictional amount, confirms that no change to the rule enunciated in Greenbaum (supra, 86 Cal. 459) and Gardiner (supra, 167 Cal. 238) was intended.
The great majority of cases throughout the years since section 396 was enacted have concluded that “ ‘the amount for which judgment is demanded in the complaint determines the jurisdiction of the court....’” (Davis v. Superior Court (1972) 25 Cal.App. 3d 596, 600 [102 Cal.Rptr. 238]; see also Sellery v. Ward (1942) 21 Cal.2d 300, 304-306 [131 P.2d 550]; Silver-man v. Greenberg (1938) 12 Cal.2d 252, 254 [83 P.2d 293]; Depretto v. *276Superior Court (1981) 116 Cal.App.3d 36, 39 [171 Cal.Rptr. 810]; Allstate Leasing Co. v. Smith (1965) 238 Cal.App.2d 128, 130-131 [47 Cal.Rptr. 636]; Muller v. Reagh (1957) 150 Cal.App.2d 99, 102 [309 P.2d 826]; Schwartz v. Cal. Claim Service (1942) 52 Cal.App.2d 47, 56 [125 P.2d 883]; Harrison v. Superior Court (1935) 3 Cal.App.2d 469, 470-471 [39 P.2d 825].) Several of these Courts of Appeal have also held, more specifically, that unless the court determines that a party’s claim establishing the amount in controversy is made in bad faith, the court’s suspicion that the claim is inflated is an insufficient basis upon which to transfer a case. (See, e.g., Depretto v. Superior Court, supra, 116 Cal.App.3d 36, 39; Davis v. Superior Court, supra, 25 Cal.App.3d 596, 600; Muller v. Reagh, supra, 150 Cal.App.2d 99, 102; Harrison v. Superior Court, supra, 3 Cal.App.2d 469, 470-471.)
I cannot agree with the majority’s assertion that for over 50 years, courts construing section 396 have misread or ignored any part of that section; indeed, I believe a plain reading of that statute does not and cannot yield the interpretation the majority adopt. Until Campbell v. Superior Court (1989) 213 Cal.App.3d 147 [261 Cal.Rptr. 509] (hereafter Campbell) was decided just two years ago, no Court of Appeal had ever suggested that a “true value of the case” standard could be applied in determining whether to transfer a case pursuant to section 396. A summary evaluation of Campbell reveals the flaws in its analysis: it cites no authority for its conclusions. Neither did it consider the history of section 396 and its precursors. Campbell acknowledges that the case law, in fact, is well established against the proposition it urges, but nevertheless divines the right to transfer from “the specific language of section 396.” (213 Cal.App.3d at p. 151.) The language of section 396 does not authorize a superior court to determine the true value of the case. (See, post, at pp. 277-279.)
Williams v. Superior Court (1989) 216 Cal.App.3d 378 [264 Cal.Rptr. 677] (hereafter Williams (RD Instruments)) relied wholly upon Campbell to uphold the superior court’s transfer of a case in which plaintiffs pleaded damages in excess of the jurisdictional minimum. In reaching a similar result, the Court of Appeal in Williams v. Superior Court (1990) 219 Cal.App.3d 171 [268 Cal.Rptr. 61] relied entirely upon Campbell and Williams (RD Instruments). In short, the only precedent the majority cite is based on Campbell's misreading of section 396.
I find nothing in statute or in case law, except for Campbell, supra, 213 Cal.App.3d 147, and the cases that followed it, that would compel or even allow the conclusion that the majority urge. Section 396 was never intended to give a superior court the authority to independently determine the “true value of the case.”
*277II.
Though the enactment of section 396 did not authorize the superior court to determine the true value of the case, it did change the pre-1933, common law jurisdictional regime with respect to transfer of cases. For the first time, section 396 expressly authorized transfer, rather than dismissal, of suits which failed to allege either the jurisdictional minimum or an equitable action that should properly be heard by the superior court.4 As importantly, it provided for a transfer mechanism after jurisdiction has been established but when the pleadings subsequently demonstrate (e.g., through amendment) that no party’s claim alleges the jurisdictional minimum. In this limited sense, paragraphs 2 and 5 of section 396 did effect a change in the prior law. However, the Courts of Appeal settled the meaning and application of those paragraphs over 30 years ago, and that meaning is not the one now adopted by the majority.
Paragraph 2 of section 396 provides that when it appears “from the verified pleadings, or at trial, or hearing”5 that the determination of an action will involve questions outside of the jurisdiction of the superior court, the court “must suspend all further proceedings therein and transfer the action or proceeding . . . .” (Italics added.) Though paragraph 2 sets out a mandatory rule, that rule is qualified by paragraph 5, which provides that nothing in section 396 “shall be construed to require the superior court to transfer any action or proceeding because the judgment to be rendered, as determined at the trial or hearing, is one which might have been rendered by a municipal . . . court . . . .” (Italics added.)
A plain reading of paragraphs 2 and 5 sets forth section 396’s rule of law with regard to transfer. The general rule (par. 2) requires the superior court *278to transfer cases in which the jurisdictional minimum was initially pled but in which subsequent pleadings render the amount in controvery less than the jurisdictional minimum. By contrast, the exception to the general rule (par. 5) “gives [superior] courts the discretion either to transfer back to the municipal courts or retain jurisdiction where what otherwise would be a lack of jurisdiction is ‘determined at the trial or hearing.’ ” (Wexler v. Goldstein (1956) 146 Cal.App.2d 410, 414 [304 P.2d 41].) Thus in Wexler the court held that, since trial had begun, the superior court was not required to transfer the case before it to the municipal court even though, as a matter of law, the evidence presented at trial established that the parties’ claims did not satisfy the jurisdictional minimum.
Relying on Wexler v. Goldstein, supra, 146 Cal.App.2d 410, one Court of Appeal determined that the superior court properly retained a case in which the cross-complaint had been dismissed at trial, thus rendering the only amount in issue far less than the jurisdictional minimum. (Towle v. Lewis (1969) 274 Cal.App.2d 376, 377 [79 Cal.Rptr. 124].) Conversely, Courts of Appeal have held that when, because of pretrial rulings, the amount in controversy as reflected in the pleadings is less than the jurisdictional minimum, transfer to the municipal court is mandatory. (See Linnick v. Sedelmeier (1968) 262 Cal.App.2d 12, 15 [68 Cal.Rptr. 334]; Adams v. County of San Joaquin (1958) 162 Cal.App.2d 271, 276 [328 P.2d 250].)
Paragraphs 2 and 5 of section 396 are intended to promote the efficient administration of the courts. Indeed, they serve this purpose well. If before trial the remaining pleadings establish that the amount in controversy is less than the jurisdictional minimum because, for example, a demurrer to one claim has been sustained or a cross-complaint which was the basis for the court’s jurisdiction has been dismissed, there is no reason for the superior court to retain the case, and the cases make it clear that it must transfer the matter to the municipal court. If, however, the case has already gone to trial and absorbed the superior court’s time and resources, it is reasonable that the superior court should retain discretion to hear the case to its conclusion.
The majority acknowledge that this reading of paragraphs 2 and 5 is “a plausible interpretation of the statutory scheme.” (Maj. opn., ante, at p. 266.) I submit that it is not only a plausible interpretation of the statute, but the only plausible interpretation of the statute. While the majority “believe [section 396’s] language is sufficiently broad to allow a trial court to ‘reconsider’ the jurisdictional-amount question even after jurisdiction has been initially satisfied by good faith pleadings” (maj. opn., ante, at p. 266), they never propose an alternate reading of the statute or even point to an ambiguity in its text. Simply put, there is nothing in the language of section 396 *279that authorizes a superior court to look beyond a party’s good faith pleading and to determine the true value of the case.
III.
The majority do not propose a reading of section 396 that would support the result at which they arrive. Instead, they abandon the settled meaning of section 396 because, if we were to affirm that interpretation, “we would have to conclude that the statute substantially impairs the efficiency of respondent court.” (Maj. opn., ante, at p. 267.) The argument, derived from Millholen v. Riley (1930) 211 Cal. 29 [293 P. 69], arises from the constitutional requirement of separation of powers. As Millholen explained, “A court set up by the Constitution has within it the power of self-preservation, indeed, the power to remove all obstructions to its successful and convenient operation. This arises from the fact that it is part of and belongs to one of the three independent departments set up by the Constitution.” (Id. at pp. 33-34.) Thus, we held in Millholen, supra, that the Legislature could not refuse to release funds to pay the salary of a court employee.
Far from supporting the conclusion that the majority draw today, Millholen v. Riley, supra, 211 Cal. 29, actually relied for its holding on a case that specifically acknowledged the Legislature’s primacy in determining matters of court procedure: “[t]he legislature may put reasonable restrictions upon constitutional functions of the courts provided they do not defeat or materially impair the exercise of those functions. This power has been described as follows: ‘. . . the mere procedure by which jurisdiction is to be exercised may be prescribed by the Legislature, unless, indeed, such regulations should be found to substantially impair the constitutional powers of the courts, or practically impair their exercise.’ [Citation omitted.]” (Brydonjack v. State Bar (1929) 208 Cal. 439, 444 [281 P. 1018, 66 A.L.R. 1507], italics added.)
For well over a century we have acknowledged the Legislature’s power to determine the procedures that the courts follow unless a statute “substantially impairs” the constitutional power of the courts. (See, e.g., Ex parte Harker (1875) 49 Cal. 465, 467; Sacramento & San Joaquin Drainage Dist. v. Superior Court (1925) 196 Cal. 414, 432 [238 P. 687].) Respected commentators observe that “[t]he Legislature has broad power to prescribe the procedure under which the courts exercise their constitutional or statutory jurisdiction.” (2 Witkin, Cal. Procedure (3d ed. 1985) Courts, § 135, p. 157.) Indeed, even the California Constitution provides that the Judicial Council’s powers to adopt rules for court administration must be “not inconsistent with statute.” (Cal. Const., art. VI, § 6.)
The settled interpretation of section 396 does not substantially impair the constitutional power of the courts. It is the superior courts that have found it *280expedient to transfer cases to the municipal courts. Even were such an arrangement more efficient to the court system as a whole, the Legislature might prefer for policy reasons that superior courts hear certain cases, e.g., so that plaintiffs not be denied the right to have a jury, rather than a judge, determine whether they are entitled to damages above the jurisdictional minimum of the superior court. Courts have no business substituting their own policy choices for those of the Legislature. So long as procedural statutes do not threaten to divest the courts of the powers granted to them under article VI, section 1 of the California Constitution, we are bound to enforce the statutes.
The majority today give cursory attention to the cases considering the inherent powers of the judiciary before setting forth a new, relaxed standard for determining when the Legislature has infringed upon the court’s powers. Under the previously established standard, the courts would interfere with legislative mandate only where the legislation substantially impaired the fulfillment of the court’s constitutional duties. Under the majority’s holding, a legislative measure is subject to invalidation or reinterpretation if the court fears the measure will interfere with the “ ‘orderly administration of justice.’ ” (Maj. opn., ante, at p. 266.) This holding is an unprecedented invitation to the courts to engage in judicial legislation. I cannot join in it.
IV.
It is certainly arguable that, as a policy matter, an appropriate means of dealing with the problem of inflated claims is to grant superior courts the power to transfer cases based on the court’s independent evaluation of the plaintiff’s likelihood of recovering damages over the statutory minimum. Yet we must also be concerned, as the facts of the present cases demonstrate, that superior courts facing heavy dockets may be tempted to transfer cases in many instances in which transfer is inappropriate. Policing unwarranted transfers will simply add to the appellate courts’ burden. In any event, whatever one may think of the majority’s solution as a matter of policy, I think it is clear from the wording of our current statutes that the Legislature has not yet adopted that approach.
More important, our duty is to follow the rules and procedures prescribed by statute. The courts’ interest in their efficient administration does not give the judiciary license to overturn or rewrite statutes unless the fulfillment of the courts’ constitutional duties is substantially impaired. Section 396, whatever its interpretation, does not threaten to substantially impair the performance of our duties under the California Constitution.
Accordingly, while I agree that the superior court erred in transferring the present cases, I do not reach that conclusion on the ground that the trial
*281courts abused their discretion on the facts of these cases. Rather, I conclude that under the current statutes the courts lacked authority to transfer the cases so long as the complaints in good faith pled damages within the jurisdiction of the superior court.
Mosk, J., concurred.
Petitioner’s application for a rehearing by the Supreme Court was denied May 23, 1991. Broussard, J., was of the opinion that the application should be granted.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
In 1933, former section 1032, subivision (d) was added, which read in pertinent part: “if the prevailing party recovers a judgment that could have been rendered in a court inferior in jurisdiction in the county. . ., such prevailing party shall not recover costs unless the judge,
. . . makes an order, allowing costs or such part thereof as he deems proper.” Today, the counterpart to former section 1032, subdivision (d), is section 1033, subdivision (a), which reads: “In the superior court, costs or any portion of claimed costs shall be as determined by the court in its discretion in accordance with [the applicable procedure] where the prevailing party recovers a judgment that could have been rendered in a court of lesser jurisdiction.”
“Nothing herein shall be construed to require the superior court to transfer any action or proceeding because the judgment to be rendered, as determined at the trial or hearing, is one which might have been rendered by a municipal or justice court in the same county or city and county.”
“Jurisdictional minimum” is hereafter used to refer to both the amount and nature of claims brought before the superior court. Thus, I include in the phrase, “failure to allege the jurisdictional minimum,” pleadings that fail to assert equitable claims that would properly put a case before the superior court.
The Campbell court mistakenly construed the word “hearing” as used in section 396 to encompass a pretrial hearing held to determine the true value of the case before the superior court. (Campbell, supra, 213 Cal.App.3d at pp. 150-151.) This reading is insupportable when one views the history of section 396.
The complementary words “petition” and the forum in which a petition is brought, “hearing,” were added to section 396 in 1935. “Under the 1933 provisions of section 396 there was some doubt whether the section applied to special proceedings as well as to ordinary civil actions. In 1935 the appropriate words were added to make it clear that the section does so apply.” (Legislation (1936) 9 So.Cal.L.Rev. 240, 245.) Thus the 1935 addition of the words “or hearing” reflect nothing more than a legislative effort to accommodate the differences between “proceedings” and “actions” within the scope of the statute.
This use of the word “hearing,” the asserted ambiguity on which the Campbell court relied, is not considered an ambiguity by the majority for the reasons discussed above.