State Supreme Court skeptical of challenge to Prop. 22's classification of app workers

State Supreme Court justices appeared disinclined Tuesday to strike down a voter initiative that allows certain app workers to be classified as independent contractors as unconstitutional in its entirety.

Scott A. Kronland, an attorney with Altshuler Berzon LLP who represents Uber Technologies Inc., Lyft Inc. and DoorDash Inc. drivers challenging Proposition 22, argued that the state Constitution grants the Legislature "unlimited" power to enforce a workers compensation system that cannot be removed by a voter initiative.

Under Prop. 22, "it isn't possible for the Legislature to do what the Constitution says the Legislature has the power to do," he told the court, saying such a change can only be accomplished by a constitutional amendment.

But justices didn't seem eager to embrace Kronland's argument that the Legislature had unlimited power over the workers compensation system. Castellanos v. State of California et al., S279622 (Cal. S. Ct., filed April 21, 2023).

"Isn't the initiative power somewhat or equally powerful?" asked Chief Justice Patricia Guerrero, an appointee of Gov. Gavin Newsom.

Kronland said no, because Article XIV of the state Constitution, which established the state workers compensation system, could not be repealed by an initiative. But several justices were skeptical about his argument, especially because state initiatives had been created in 1911, just seven years before the workers compensation system was established by constitutional amendment.

"What evidence is there that voters didn't have in mind the initiative power?" asked Justice Goodwin H. Liu, an appointee of Gov. Jerry Brown.

Kronland countered that the power granted to the Legislature could only be withdrawn by a constitutional amendment.

Justice Joshua P. Groban, a Brown appointee, also expressed dissatisfaction with Kronland' argument. "It is a highly technical parsing of the language of what the voters decided in the early 1900s," he said.

Prop. 22, which passed with 59% of the vote in 2020, was opposed by labor unions because independent contractors lack the same rights of employees, including minimum wage, overtime and sick leave protections.

Jeffrey L. Fisher, a partner with O'Melveny & Myers LLP who represents Prop. 22's corporate backers, Protect App-Based Drivers and Services, said voters had the same authority as the Legislature. "Whatever the Legislature can do, the people can do," he said.

Justices also did not seem inclined to provide guidance requested by Kronland on whether the Legislature could amend Prop. 22.

Liu asked Solicitor General Michael J. Mongan whether he had a position on that. "We don't think you need to reach the question," he replied, noting that there is no proposal before the court.

The state defended the law, and Mongan said its position differs from the app companies in suggesting it would be "deeply problematic if the Legislature could be frozen out in the future."

Liu said it would be premature to provide the guidance Kronland requested. "I don't know what guidance the court could provide," he said, adding it would be better to answer that question in the context of a future case.

1st District Judge Tracie L. Brown, a Newsom appointee writing for a divided panel last year, partially reversed a decision by Alameda County Superior Court Judge Frank Roesch, who had struck down the initiative in its entirety. She concluded the people, through the initiative process, have plenary power under the Constitution to enact the statute.

"As courts must liberally construe the initiative power and resolve doubts in favor of the use of the initiative wherever reasonable, this is the interpretation of Article XIV, Section 4 that we must adopt," she wrote.