California Courts of Appeal
Apr. 7, 2017
Current, retired state judges are owed $36 million, appellate court rules
California's active and retired judges are owed $36 million in overdue salary and benefits, a state appeal court ruled Wednesday.
Daily Journal Staff Writer
California's active and retired judges are collectively owed $36 million in overdue salary, benefits and accrued interest, the 2nd District Court of Appeal ruled Wednesday, dealing a loss to state Controller Betty T. Yee and the California Public Employees' Retirement System, known as CalPERS.
Robert M. Mallano, a former 2nd District Court of Appeal justice and Los Angeles County Superior court judge, was the lead plaintiff for a class of 3,400 active and retired judges who claimed that the state government illegally withheld mandatory annual raises.
According to Wednesday's unanimous opinion, about 1,600 active judges could each receive withheld compensation and interest of $14,600 to $18,700 for a total of $23 million. About 1,800 retired judges could receive about $13 million in unpaid benefits and interest.
The 27-page unpublished decision completely affirms rulings by Los Angeles County Superior Court Judge Elihu M. Berle, who had presided over a bench trial. The three-judge panel took less than two weeks after hearing oral argument to issue a decision. Chang v. Mallano, B272124 (Cal. App. 2nd Dist., filed May 11, 2016).
"We are pleased with the result and hope we are nearing the point where judges and pensioners will receive the long overdue amounts to which they are entitled," said Raoul D. Kennedy, of counsel in the Palo Alto office at Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates, who represented Mallano in the case.
The panel also affirmed a $660,000 attorney fee for Kennedy and the Skadden firm after holding that the dispute raised significant concerns to the public interest.
State government lawyers argued the attorney fee award was excessive compared to lead plaintiff Mallano's recovery of $17,900 in unpaid wages and benefits.
2nd District Justice Victoria M. Chavez disagreed.
"Judicial compensation is a matter of statewide concern, as it is the principal means of protecting the independence of the judicial branch," Chavez wrote for the panel. "The instant lawsuit enforced an important right affecting the public interest."
Under Government Code section 68203, the state provides mandatory raises for judges each fiscal year based on average salary increases for all state employees during that year.
California was in the middle of the most serious economic downturn in a generation when former state controller John Chiang, who is now state treasurer, suspended judicial salary increases from fiscal years 2008-2009 to 2013-14.
During that period, state government fell into a fiscal emergency that required numerous public employees to take furloughs and work fewer hours. The amount of pay for many state employees effectively declined during this period, even though their salary rates remained level.
Deputy Attorney General Jonathan E. Rich had argued for the government that the calculation of judicial raises must take into account pay losses that other state employees endured.
Rich had argued it would be unfair for judges to receive mandatory pay raises when the vast majority of state employees were forced to work fewer hours and receive less pay.
Chavez, however, wrote in her opinion that the state's interpretation "is inconsistent with the plain language of the statute."
"There is nothing in the legislative history that indicates that the average percentage salary increase for state employees in any given fiscal year was intended to include effective salary decreases as well as increases," Chavez added later in the opinion.
2nd District Justices Brian M. Hoffstadt and Laurie D. Zelon concurred in the opinion.
Lawmakers and Gov. Jerry Brown last year passed an amendment to Government Code section 68203 providing that the calculation of annual judicial raises must take into account any state employee salary decreases that occurred as a result of furloughs or mandatory leave. The appellate panel declined to find the amendments applied retroactively.
Spokeswomen for the state Department of Justice and the state controller did not respond to requests for comment. A spokeswoman for CalPERS declined to comment.
Kevin Lee
kevin_lee@dailyjournal.com
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