CPOA CASE SUMMARIES – JANUARY 2018

CONSTITUTIONAL LAW

  1. Miranda rights apply to defendant who was questioned in circumstances where a reasonable person in defendant’s position could have concluded that he was not free to leave and thus “in custody”.

People v. Saldana, 19 Cal. App. 5th 432 (4th Dist. 2018) 

Facts: In March 2015, National City Police Detective Robert Gonzales questioned Manuel Saldana about allegations of lewd behavior upon three girls who lived in the same trailer park as Saldana. Saldana, a 58-year-old legal Mexican immigrant with a sixth-grade education, had come voluntarily to the police station in response to Detective Gonzales’ request.

The interrogation, conducted in Spanish, was video recorded. Police did not advise Saldana of his Miranda v. Arizona[1] rights at any point during this time.

After obtaining some biographical information at the start of the questioning, Detective Gonzales said, “Look, Manuel, … you’re not under arrest, okay? You can leave when you want. I mean, I’m going to ask you some questions, but the door is open, the door we came through. It’s open. You can leave when you want, okay.” After Saldana responded, “I agree,” Detective Gonzales said, “Um, we’re not going to arrest you right now. That’s why the front door is open to go out without—without us arresting you.” However, the door was actually closed, and it remained closed the entire interrogation.

For about 40 minutes, Detective Gates questioned Saldana about the allegations, but Saldana repeatedly denied the accusations. A sampling of Gates’ questioning to Saldana includes: “Did you try to touch them, Manuel?” “…maybe[] you went too far or something.” “It looks very bad, Manuel.” “I have information that that happened.” “And part of what you’re telling me, not only doesn’t it coincide, but there are some things that don’t coincide.” “And what else, Manuel? What has happened in your house? That’s what I want to know.” “Look, Manuel, something happened.” “Manuel? What did you do with them?” “What happened, Manuel?” “And I want to get to the truth. But right now, you’re not telling me the whole truth.” “Well, the truth, Manuel.” “When her clothes come[] back from the laboratory, is it [sic] going to come back with your DNA?” In response to Detective Gates’ questioning, Saldana denied the accusations over 25 times. A typical reply from Saldana was: ‘“No, nothing, sir. Nothing. I mean, I haven’t touched them. I haven’t done anything to them. I don’t have a reason to do, to do it.’”

Ultimately, about 30-40 minutes into the interrogation, Saldana confessed, stating that he touched two of the girls twice on the vagina, over their clothes as they “sit [sic] there on my hand” while the girls were playing on the sofa. Upon Detective Gonzales’s suggestion, Saldana wrote a letter asking for forgiveness. The detective asked Saldana if he felt “pleasure” when touching the girls. Saldana said, “No.” When the detective said, “You just … wanted to touch them,” Saldana replied, “No, well, I don’t know. The devil got in me, but no. No other thing. No other intentions.” The detective walked Saldana out of the station house. Police arrested Saldana minutes later, about a block away, charging him with committing lewd acts against the girls.

Before trial, Saldana’s lawyer filed a motion seeking to exclude Saldana’s confession as having been obtained in violation of Miranda. The People opposed, asserting no Miranda advisements were required because Saldana was not in custody when interrogated.

After watching the video of Saldana’s interrogation, the trial court conducted a hearing. The court denied Saldana’s motion to exclude his confession, determining that the interview was voluntary and noncustodial. Saldana’s attorney stated that, due to the court’s denial of the motion, he made a “tactical” decision to have Saldana testify to explain his confession.

During the jury trial, Saldana testified he believed he could not leave the police station unless he confessed, stating that Detective Gonzales “asked me many times and he don’t believe me I don’t [sic] did it. And I don’t [sic] did it…And I was thinking, if I say that, he will not let me go home.” He also testified that he said he had touched the girls on the vagina because he had told Detective Gonzales previously many times that he did not touch any private parts, but the detective had not believed his prior denials.

The jury watched a video (with on-screen English translation) of the first 53 minutes of Saldana’s interrogation, including his confession, and during deliberations asked to watch the confession portion again. About two hours later, the jury found Saldana guilty of four counts of committing lewd acts, violating Penal Code section 288, subdivision (a). After conducting a hearing, the court denied Saldana’s new trial motion and sentenced Saldana to six years in prison. Saldana appealed.

Held: Saldana’s confession should have been excluded because he was in custody and thus entitled to Miranda warnings, despite the fact that he had voluntarily agreed to be questioned. In reaching its conclusion, the 4th District Court of Appeal explained that Miranda required that “a person questioned by law enforcement after being ‘taken into custody’ must first be warned that he or she has the right to remain silent, that any statements he or she makes may be used against the person, and that he or she has a right to the presence of an attorney, either retained or appointed.” The Court observed that “[i]f police take a suspect into custody and then interrogate the person without informing of such rights, the person’s responses cannot be introduced into evidence to establish his or her guilt.” (Berkemer v. McCarty (1984) 468 U.S. 420, 429.)

The Court elaborated: “The obligation to administer Miranda warnings attaches only when the person questioned is in ‘custody.’” (Stansbury v. California (1994) 511 U.S. 318, 322.) “In Miranda jurisprudence, custody is ‘a term of art that specifies circumstances that are thought generally to present a serious danger of coercion.’” (Howes v. Fields (2012) 565 U.S. 499, 508–509.)

The 4th District explained that to determine whether a person is in custody under Miranda, courts determine whether, under the objective circumstances of the interrogation, a “reasonable person would have felt that he or she was not” free to stop the interrogation, “and leave.” (Howes, supra, 565 U.S. at p. 509.) The Court noted that courts look at a number of factors[2] to make their custodial determination, as described in People v. Aguilera.[3] The Court then applied its analysis of these factors to Saldana’s interrogation.

The Court observed that although Saldana voluntarily agreed to be questioned, the express purpose of the interview was to question him as a suspect; the interrogation occurred behind a closed door in the interrogation room, and was persistent, confrontational, and accusatory; and even though Saldana was initially told he was free to go, the circumstances significantly changed during the 30 minutes before the confession occurred, during which time Detective Gonzales asked an “unrelenting number of accusatory questions and repeatedly rejected defendant’s denials.” The Court said that a reasonable person in Saldana’s position could conclude that he was not free to leave unless he confessed. Taken together, these factors “objectively conveyed that Saldana was not free to leave,” and created an atmosphere equivalent to that of a formal arrest. As such, the Court concluded that Saldana had been “in custody,” and Miranda warnings were required. The Court determined that the trial court should not have denied Saldana’s motion to exclude his confession.

The 4th District noted that a defendant’s own confession was probably the most damaging evidence that could be applied to him, and determined that Saldana’s confession was likely decisive in his conviction. The 4th District consequently concluded that the trial court’s error in receiving Saldana’s confession into evidence was prejudicial. Accordingly, the Court of Appeals reversed the trial court’s judgment.

  1. Detainment and search of a student on a public school campus was reasonable under the Fourth Amendment where the detention is not arbitrary, capricious, or for the purpose of harassment; and where officers had reasonable grounds for searching the student.

In re K.J., 18 Cal. App. 5th 1123 (1st Dist. 2018)

Facts: In December 2015, an anonymous student at Solano County’s Fairfield High School sent a text message to the school’s vice principal (“VP”), alerting him that a student had a loaded gun on school grounds. Soon thereafter, the VP met with another school official and the campus resource officer, Fairfield Police Officer Paula Gulian. After receiving the VP’s information, Officer Gulian called for a backup officer, as per police protocol.

About ten minutes after the first message, the VP received more information from the student tipster about the gunman, including a social media video showing a student displaying a firearm and magazine clip in a school classroom. The VP learned that the tipster knew the suspect, though not by name, and that he was a former Fairfield High student. The tipster also described the suspect’s gender, race, and dreadlocks hairstyle. Based on this information, the VP and the other school official came up with the names of two students who fit the tipster’s description. After the VP proffered these two names, the student tipster identified appellant K.J. as the student in the video.

After the backup officer arrived, the two officers and the other school official went to K.J.’s classroom. Unlike the VP, Officer Gulian had not viewed the tipster’s video by this point. After the other school official escorted K. J. from the classroom to the hallway, Officer Gulian confiscated K. J.’s backpack and handcuffed him. The officers searched K. J., finding a bullet magazine containing seven rounds of ammunition and an unloaded nine-millimeter Taurus semi-automatic in his clothing. Following a combined motion to suppress evidence and jurisdictional hearing, the juvenile court sustained a petition alleging appellant possessed a weapon on school grounds. K.J. appealed, contending his motion to suppress should have been granted because the detention and search violated his Fourth Amendment right to be free from unreasonable search and seizure.

Held: K. J.’s detention and search by Officer Gulian and the backup officer were reasonable under the Fourth Amendment. In making its determination, the First District Court of Appeal initially observed that, under In re Randy G,[4] students are protected by the Fourth Amendment against unreasonable searches and seizures on a public school campus. The Court noted that “a public school student’s legitimate expectation of privacy is balanced against the school’s obligation to maintain discipline and to provide a safe environment for all students and staff. (In re Cody S. (2004) 121 Cal.App.4th 86, 90.)” The Court explained that a school official[5] could detain a student for questioning on campus, without reasonable suspicion, providing the detention was “not arbitrary, capricious, or for the purpose of harassment.”[6] The Court explained that reasonable suspicion was the appropriate standard for public school official searches upon students.

Regarding K.J.’s detention by the officers, the Court found that substantial evidence supported the juvenile court’s express findings that Officer Gulian was acting as a school officer and that the detention occurred on school property. Officer Gulian testified that her duties as a campus resource officer included crimes committed on campus. She had learned of a gun threat on campus before detaining K.J. K.J. had been identified as the source of the threat. When K.J. exited the classroom, she immediately grabbed K.J.’s backpack and put him in handcuffs as a safety measure to make sure that, if he did have a gun, he would not be able to grab the weapon. She further testified that it was police procedure to control a suspect’s hands when a gun is involved. Considering these combined facts, the Court found that the detention was neither arbitrary, capricious or for the purpose of harassment. As such, the Court held that the detention was lawful.

The Court next considered K.J.’s contention that the search was not “justified at its inception.” Under New Jersey v. T.L.O.,[7] a search is justified at its inception if under “ordinary circumstances” the information constituted “reasonable grounds for suspecting that the search will turn up evidence that the student has violated or is violating either the law or the rules of the school.” Here, the Court stated that extraordinary circumstances of the gun threat on school grounds made the need to search even more compelling. The Court also considered that the tipster had delivered information and video conveying specific knowledge of the gun threat, including the suspect’s location, gender, race, hairstyle, his status as a former student, and ultimately his name. The VP had provided much of this information to Officer Gulian. In light of these factors, the Court concluded that the search was reasonable based on the extraordinary danger posed by the possibility that a student wielded a firearm on school grounds.

The Court thus held that both the detention and the search were consistent with the Fourth Amendment and affirmed the juvenile court’s ruling.

  1. Community caretaker exception applies to search of residence of reportedly suicidal man.

People v. Ovieda, 2018 Cal. App. LEXIS 34 (2nd Dist. Jan. 17, 2018)

Facts: In June 2015, the sister of plaintiff Ovieda told a 911 operator that Ovieda threatened to kill himself and had attempted suicide before. Santa Barbara Police Officer Mark Corbett responded to the 911 call. Another officer phoned Ovieda’s friend Trevor Case inside the house. Case went outside and reported that Ovieda had threatened to commit suicide and tried to grab several firearms in his bedroom. Case and his wife had physically restrained Ovieda to keep him from killing himself. While Case’s wife restrained Ovieda, Case searched for additional firearms in the bedroom. Case found a handgun, two rifles, and ammunition and moved them to the garage. Case was unsure whether Ovieda had additional weapons in the house

Ovieda agreed to come outside, was detained, and falsely denied having made suicidal comments or that he had any firearms. Ovieda said he was depressed because a friend committed suicide the week before. Officer Corbett described the situation as “emotional and dynamic.” He believed a cursory search was necessary because it was unknown how many more weapons were in the house, whether the weapons were secure, and whether anyone inside the house needed was injured or needed medical attention. It was a concern because the person who made the 911 call, Ovieda’s sister, was not at the scene and the officers did not know anything for sure. A second officer agreed a safety sweep was necessary to confirm that; (1) there were no other people in the house; (2) nobody else was hurt; and (3) there were no dangerous weapons or firearms left out in the open.

During the officers’ cursory sweep, they saw multiple firearms, ammunition, high-capacity magazines for an assault weapon, marijuana, concentrated cannabis, and drug cultivation equipment. Officer Corbett believed that two of the rifles the officers saw were illegal assault weapons. Based on 15 years in narcotics-related investigations, Corbett believed that the marijuana lab posed an immediate risk of fire or explosion.

Ovieda brought a motion to suppress the drug manufacturing and assault weapon evidence. The trial court denied the motion, finding that the community caretaker exception to the exclusion rule applied. Ovieda was convicted by plea to manufacturing concentrated cannabis[8] and possession of an assault weapon.[9] Ovieda appealed his conviction, claiming his Fourth Amendment rights were violated when the officers searched his residence.

Held: The California Second District Court of Appeal affirmed the trial court’s decision, concluding that the officers acted reasonably when they entered the house to perform the cursory search after Ovieda came outside.

The Court observed that in People v. Ray,[10] the California Supreme Court stated that the community caretaking exception to the Fourth Amendment permitted police to make a warrantless search of a home if the search was unrelated to the criminal investigation duties of the police. The Supreme Court found that, under this exception, circumstances “short of a perceived emergency” could justify a warrantless entry to preserve life or protect property. In such circumstances, officers were expected to help those in physical harm, assist people unable to take care of themselves, resolve conflicts, or provide other services on an emergency basis.

Applying Ray to the present case, the Court of Appeal noted that Officer Corbett responded to a 911 call made by a concerned family member to help a suicidal person. Ovieda’s friend reported that Ovieda had to be physically restrained from killing himself and that he removed firearms himself from Ovieda’s bedroom to the garage. Officers were told Ovieda had previously attempted suicide, yet were unsure of whether additional firearms were inside the residence. Ovieda’s sister who made the call was not visibly present at the scene, leading officers to consider her safety or that of other possible persons in the house. Citing People v. Roberts,[11] the Court noted that “[w]hen it comes to choosing between the Fourth Amendment protection against warrantless searches and the preservation of life, the preservation of life controls.” Considering these circumstances, the Court found that the officers’ cursory search had nothing to do with any criminal investigation, but rather constituted a pure community caretaking function. The Court of Appeal concluded that the entry and cursory search did not violate Ovieda’s Fourth Amendment rights. Accordingly, the Court affirmed the trial court’s denial of Ovieda’s motion to suppress.

For a more detailed discussion of this case, please see Client Alert Vol. 33, No. 2, available at www.jones-mayer.com.

  1. Officers entitled to qualified immunity for arrest of trespassing partygoers.

District of Columbia v. Wesby, 2018 U.S. LEXIS 760 (U.S. Jan. 22, 2018)

Facts: In March 2008, District of Columbia Metropolitan Police Department received a complaint of loud music and illegal activities at a house in Northeast D.C. The caller told police that the house had been vacant for several months. When officers arrived at the scene, several neighbors confirmed that the house should have been empty. The officers approached the house and, consistent with the complaint, heard loud music playing inside. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. There was no furniture downstairs other than a few padded metal chairs. Officers found a make-shift strip club in the living room, with several women in their underwear dancing and onlookers with cash in hand. In an upstairs bedroom, officers found a naked woman and several men. Officers saw one bare mattress on the floor, multiple open condom wrappers, and a used condom. Many partygoers scattered when they saw the uniformed officers, and some hid.

The officers questioned the 21 partygoers and got inconsistent stories. Many partygoers said they were there for a bachelor party, but no one could identify the bachelor. Each of the partygoers claimed that someone had invited them to the house, but no one could say who. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party, but Peaches was not there. One of these women suggested Peaches had just started renting the house, but there were no boxes or moving supplies. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The officers contacted the owner, who confirmed that he had not given anyone permission to be there. The officers then arrested the 21 partygoers for unlawful entry. The police transported the partygoers to the police station, where the lieutenant decided to charge them with disorderly conduct. The partygoers were released, and the charges were eventually dropped.

Several partygoers sued the District and arresting officers for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that the officers were not entitled to qualified immunity. On appeal, a divided panel of the D. C. Circuit affirmed.

The United States Supreme Court granted review to resolve whether the officers had probable cause to arrest the partygoers, and whether the officers were entitled to qualified immunity.

Held:

  1. The officers had probable cause to arrest.

Addressing the probable cause issue, the Supreme Court began by explaining that the Fourth Amendment protects people from unreasonable searches and seizures. As arrests are “seizures” of persons, they must be reasonable under the circumstances. A warrantless arrest is reasonable if the officer has probable cause to believe that the suspect committed a crime in the officer’s presence. Atwater v. Lago Vista, 532 U. S. 318, 354 (2001). The Court observed that, “[t]o determine whether an officer had probable cause for an arrest, ‘we examine the events leading up to the arrest, and then decide “whether these historical facts, viewed from the standpoint of an objectively reasonable police officer, amount to” probable cause.’” Maryland v. Pringle, 540 U. S. 366, 371 (2003) (quoting Ornelas v. United States, 517 U. S. 690, 696, (1996)). The Court noted that the probable-cause standard deals with probabilities and depends on the totality of the circumstances. The Court further stated, “Probable cause “´is not a high bar.’” Kaley v. United States, 571 U. S. ___, ___ , 134 S. Ct. 1090, 1103 (2014).

Applying the standard to the present case, the Court observed that taken together (1) the information from the neighbors; (2) the condition of the house; and (3) the conduct of the partygoers allowed the officers to make several logical conclusions about the partygoers. Because most homeowners did not live in such conditions or permit such activities in their homes, the officers could infer that the partygoers knew that the party was not authorized. The officers also could infer that the partygoers knew that they were not supposed to be in the house because they scattered and hid when the officers arrived. The partygoers’ vague and implausible answers to questioning also gave the officers reason to infer that the partygoers were lying and that their lies suggested a guilty mind. Peaches’ lying and evasive behavior gave the officers reason to discredit everything she said. The officers also could have inferred that she lied when she said she had invited the partygoers to the house, or that she told the partygoers that she was not actually renting the house.

Considering the totality of the circumstances, the Court concluded, the officers made an “‘entirely reasonable inference’” that the partygoers were knowingly taking advantage of a vacant house as a venue for their late-night party. Pringle, supra, at 372. The Court held that a reasonable officer could conclude that there was probable cause to believe the partygoers knew they did not have permission to be in the house. Accordingly, the Court reversed the D.C. Circuit’s probable-cause holding.

  1. The officers were entitled to qualified immunity.

The Supreme Court next addressed whether the officers were entitled to qualified immunity. The Court initially noted that, “Our conclusion that the officers had probable cause to arrest the partygoers is sufficient to resolve this case. But where, as here, the Court of Appeals erred on both the merits of the constitutional claim and the question of qualified immunity, ‘we have discretion to correct its errors at each step.’” Ashcroft v. al-Kidd, 563 U. S. 731, 735 (2011); see, e.g., Plumhoff v. Rickard, 572 U. S. ___, 134 S. Ct. 2012 (2014). The Court stated, “[w]e exercise that discretion here because the D. C. Circuit’s analysis, if followed elsewhere, would “‘undermine the values qualified immunity seeks to promote.’” al-Kidd, supra, at 735.

The Court explained, “[u]nder our precedents, officers are entitled to qualified immunity under §1983 unless (1) they violated a federal statutory or constitutional right, and (2) the unlawfulness of their conduct was “‘clearly established at the time.’” Reichle v. Howards, 566 U. S. 658, 664 (2012). The Court further noted, “‘[c]learly established’ means that, at the time of the officer’s conduct, the law was “‘sufficiently clear’ that every ‘reasonable official would understand that what he is doing’” is unlawful.” al-Kidd, supra, at 741 (quoting Anderson v. Creighton, 483 U. S. 635, 640, 107 S. Ct. 3034, 97 L. Ed. 2d 523 (1987)). “In other words, existing law must have placed the constitutionality of the officer’s conduct ‘beyond debate.’” al-Kidd, supra, at 741. The Court stated that this “demanding standard protects ‘all but the plainly incompetent or those who knowingly violate the law.’” Malley v. Briggs, 475 U. S. 335, 341 (1986). The Court next noted that, in the warrantless arrest context, a body of relevant case law is usually necessary to clearly establish the answer with respect to probable cause.

In the present case, the Court found that even assuming that the officers lacked actual probable cause to arrest the partygoers, they were entitled to qualified immunity because, given the circumstances with which they were confronted, they reasonably but mistakenly concluded that probable cause was present. The Supreme Court observed that neither the D.C. Circuit’s panel majority nor the plaintiff partygoers identified a single precedent finding a Fourth Amendment violation under similar circumstances. Nor was this an obvious case where a body of relevant case law was unnecessary.

The Supreme Court rejected the D.C. Circuit’s reasoning that a suspect’s bona fide belief of a right to enter vitiates probable cause to arrest for unlawful entry. The Supreme Court found that looking at the entire legal landscape at the time of the arrests, a reasonable officer could have interpreted the law as permitting the arrests here. There was no controlling case holding that a bona fide belief of a right to enter defeated probable cause, that officers could not infer a suspect’s guilty state of mind based on his conduct alone, or that officers must accept a suspect’s innocent explanation at face value. The Court further found there was no clearly established unlawful conduct committed by the officers under these circumstances here. As such, the Court held that the officers were entitled to qualified immunity.

The Supreme Court, accordingly, reversed and remanded the judgment of the D. C. Circuit panel.

For a more detailed discussion of this case, please see Client Alert Vol. 33, No. 3, available at www.jones-mayer.com.

PUBLIC EMPLOYEES – RETIREMENT

Panel of First District Court of Appeal declines to follow fellow panel’s analysis in pension formula case.

Alameda County Deputy Sheriff’s Association et al. v. Alameda County Employees’ Retirement Association et al., 19 Cal. App. 5th 61(1st Dist. 2018)

Facts: This case involved consolidated challenges to amendments made to the County Employees Retirement Law of 1937 (“CERL”) law by the California Public Employees’ Pension Reform Act of 2013 (“PEPRA” or “AB 197”). Appellants in the case include Alameda County and Contra Costa County and their respective Deputy Sheriffs’ Associations, as well as the Merced County Sheriffs’ Association. The parties challenged their respective county employee retirement associations’ ability to implement AB 197 as to legacy members.

Among other things, the parties sought a declaration that the county employee retirement associations’ actions in implementing AB 197 as to legacy members was an unconstitutional impairment of a vested contractual right to have “the value of accrued leave cash-outs exceeding the amount that was both earned and payable during their ‘final compensation’ period” included in their “compensation earnable.” The parties also sought a writ of mandate directing the employee retirement associations to calculate legacy members’ retirement allowance in accordance with their policies and procedures in place prior to the implementation of AB 197 and also sought injunctive relief prohibiting the associations from further implementing AB 197.

The Contra Costa Superior Court judge that heard the consolidated matters denied the request that the court declare the associations’ actions unconstitutional impairments of vested contractual rights and also declined to issue a writ of mandate or grant declaratory or injunctive relief on the issue of leave cash-outs to be included in “compensation earnable” and “final compensation.” The deputy sheriffs’ associations appealed.

Held: The Court of Appeal concluded that because PEPRA effected substantive changes to CERL law with respect to on-call payments and so-called pension enhancements, a vested rights analysis is required.

Division Four of the First District Court of Appeal began its analysis by briefly discussing the history of CERL and California Government Code section 31461.[12] It then discussed the changes to CERL effected by PEPRA, the actions taken by the retirement boards in each of the three counties to conform their systems to PEPRA, and the litigation initiated by appellants challenging the boards’ implementation actions as an unlawful impairment of legacy members’ constitutionally protected pension rights. The Court also rejected the argument that the boards have Guelfi[13] discretion—the discretion to include additional pay items in compensation earnable without being bound by the language of CERL. The Court explained that if an item is not compensation, compensation earnable, or final compensation under CERL statutes, it cannot be included in a member’s pensionable compensation under CERL.

The Court next addressed the impacts of each of the challenged amendments to Section 31461.

Leave Cash-Outs Under Subdivision (b)(2)

First, the Court explained that under the amended version of Section 31461, compensation earnable expressly excludes “[p]ayments for unused vacation, annual leave, personal leave, sick leave, or compensatory time off, however denominated, whether paid in a lump sum or otherwise, in an amount that exceeds that which may be earned and payable in each 12-month period during the final average salary period, regardless of when reported or paid.” The Court adopted the position that compensation must be earned in the final compensation period in order to be pensionable.

Next, the Court addressed whether in-service leave cash-outs are earned when the leave at issue is accrued or when the employee earns the right to sell that leave in cash. Citing Ventura County Deputy Sheriffs’ Assn. v. Board of Retirement[14] and In re Retirement Cases,[15] the Court determined that an employee’s election to turn an otherwise in-kind benefit into cash, either through a leave cash-out or by choosing to take vacation pay without working, creates “remuneration in cash” that is pensionable compensation under CERL. Accordingly, the Court supported the trial court’s conclusion that the new subdivision (b)(2) of Section 31461 did not change existing law with respect to in-service leave cash-outs. However, the Court rejected the trial court’s determination of when such cash-outs are earned for purposes of CERL. The Court held that leave cash-outs must be included in a member’s pensionable compensation to the extent the member exercises his or her option to convert the leave into cash during the final compensation period, regardless of when that leave time was accrued.

Terminal Pay Under Subdivision (b)(4)

The Court agreed with the trial court’s conclusion that subdivision (b)(4) did not result in a change to existing CERL law because CERL has always required that compensation be payable during the final compensation period in order to be included in compensation earnable.

Pay “Outside of Normal Working Hours” Under Subdivision (b)(3)

The Court next addressed the exclusion set forth in subdivision (b)(3) of Section 31641, which provides that “[p]ayments for additional services rendered outside of normal working hours, whether paid in a lump sum or otherwise” may not be included in compensation earnable. The Court noted that no party argued that overtime pay was ever a permissible component of compensation earnable under CERL, but that the parties disputed whether on-call, standby and similar pay items should be included in pensionable compensation.

The Court first concluded that on-call, standby and similar payments were included in compensation earnable prior to PEPRA to the extent they constituted remuneration for on-call services provided by an employee as part of his or her regular work assignment. Then, the Court addressed whether CERL permitted on-call payments to be pensionable only to the extent they were received by others in the same grade or class, concluding that any such pre-PEPRA right is not limited to on-call premiums received by employees in the same group or class. Having concluded that legacy members were entitled to the inclusion of on-call pay in the calculation of their pension benefits to the extent that the on-call duty was part of their regular work assignments, the Court next addressed whether PEPRA’s addition of subdivision (b)(3) to Section 31461 changed the law. The Court concluded that PEPRA meant to exclude from compensation earnable such on-call and standby payments, and therefore constituted a change to CERL law.

Enhancement Payments Under Subdivision (b)(1)

The Court next addressed the new subdivision (b)(1) of Section 31461, which excludes from compensation earnable “[a]ny compensation determined by the board to have been paid to enhance a member’s retirement benefit.” Because the Court found that the addition of subdivision (b)(1) changed CERL law, it concluded that it must be subjected to a vested rights analysis to determine whether legacy members have the right to have their pensions calculated without reference to the new requirements of subdivision (b)(1).

Vested Rights

Because it concluded that PEPRA made substantive changes to CERL law with respect to on-call payments and so-called pension enhancements, the Court next addressed the question of whether those changes constituted a reasonable modification to prior CERL law or whether the effect of the changes is to impair vested contractual rights of legacy members. The Court reviewed California Supreme Court precedent relating to vested pension rights. It then reviewed Division Two of the First District’s decision in Marin Assn. of Public Employees v. Marin County Employees’ Retirement Assn.,[16] wherein Division Two concluded that PEPRA’s changes to CERL’s definition of compensation earnable did not amount to an unconstitutional impairment of the vested pension rights of Marin County Employees’ Retirement Association legacy members. The Court noted that Division Two in its opinion had noted that the changes to Section 31461 were “quite modest” while detailing the unfunded pension liability crisis. Division Two, the Court explained, balanced the amendments to Section 31461 against the significance of the problem they were intended to address and concluded that, in light of the need for change, the change was reasonable.

The Court declined to follow Marin. It noted its belief that the Marin court improperly relied on its “general sense” of what a reasonable pension might be rather than recognizing that the Supreme Court has expressly defined a reasonable pension as one which is subject only to reasonable modification. The Court explained that an employee’s right to a reasonable pension can only be judged in the context of the balancing analysis established by Allen v. City of Long Beach,[17] wherein the Supreme Court held that, to be sustained as reasonable, “alterations of employees’ pension rights must bear some material relation to a theory of a pension system and its successful operation, and changes in a pension plan which result in disadvantage to employees should be accompanied by comparable new advantages.”

Applying the principles outlined in vested rights precedent to this case, the Court concluded that the reasonableness of the PEPRA amendments must be judged independently in each of the three counties. Because the trial court did not conduct the required vested rights analysis and did not consider the impacts of the changes, the Court concluded it did not have sufficient information to resolve the vested rights disputes on appeal, and that remanding the case was necessary.

The Court directed the trial court to recognize that because no corresponding new advantages were provided with respect to the detrimental changes to compensation earnable effected by PEPRA, the application of the detrimental changes to legacy members “can only be justified by compelling evidence establishing that the required changes ‘bear a material relation to the theory . . . of a pension system’ and its successful operation.” It further directed that the trial court’s analysis focus on the impacts of the disadvantages on legacy members and, if the justification for the changes is the financial stability of the specific CERL system, the court’s analysis must consider whether the exemption of legacy members from the changes would cause that particular system to have difficulty meeting its pension obligations with respect to those members.

The Court remanded the case for determinations, in accordance with its analysis, as to the reasonableness of PEPRA’s detrimental changes when applied to the vested rights of legacy members in the three counties.

For a more detailed discussion of this case, please see Client Alert Vol. 33, No. 1, available at www.jones-mayer.com.

[1] 384 U.S. 436 (1966).

[2] “No one factor is dispositive. Rather, we look at the interplay and combined effect of all the circumstances to determine whether on balance they created a coercive atmosphere such that a reasonable person would have experienced a restraint tantamount to an arrest. The relevant factors include: [1] whether contact with law enforcement was initiated by the police or the person interrogated, and if by the police, whether the person voluntarily agreed to an interview; [2] whether the express purpose of the interview was to question the person as a witness or a suspect; [3] where the interview took place; [4] whether police informed the person that he or she was under arrest or in custody; [5] whether they informed the person that he or she was free to terminate the interview and leave at any time and/or whether the person’s conduct indicated an awareness of such freedom; [6] whether there were restrictions on the person’s freedom of movement during the interview; [7] how long the interrogation lasted; [8] how many police officers participated; [9] whether they dominated and controlled the course of the interrogation; [10] whether they manifested a belief that the person was culpable and they had evidence to prove it; [11] whether the police were aggressive, confrontational, and/or accusatory; [12] whether the police used interrogation techniques to pressure the suspect; and [13] whether the person was arrested at the end of the interrogation.”

[3] 51 Cal. App. 4th 1151 (1996).

[4] 26 Cal. 4th 556 (2001).

[5] The Court observed that for purposes of Fourth Amendment analysis, the term “school officials” includes police officers who are assigned to high schools as resource officers, as well as backup officers who are called to assist them (like the officers here).

[6] In re Randy G., 26 Cal. 4th at p. 565 (2001).

[7] 469 U.S. 325 (1985).

[8] Health & Saf. Code, section 11379.6(a).

[9] Pen. Code, section 30605(a).

[10] 21 Cal.4th 464 (1999).

[11] 47 Cal.2d 374 (1956).

[12] (a) “‘Compensation earnable’ by a member means the average compensation as determined by the board, for the period under consideration upon the basis of the average number of days ordinarily worked by persons in the same grade or class of positions during the period, and at the same rate of pay. The computation for any absence shall be based on the compensation of the position held by the member at the beginning of the absence. Compensation, as defined in Section 31460, that has been deferred shall be deemed ‘compensation earnable’ when earned, rather than when paid.

(b) ‘Compensation earnable’ does not include, in any case, the following:

(1) Any compensation determined by the board to have been paid to enhance a member’s retirement benefit under that system. That compensation may include:

(A) Compensation that had previously been provided in kind to the member by the employer or paid directly by the employer to a third party other than the retirement system for the benefit of the member, and which was converted to and received by the member in the form of a cash payment in the final average salary period.

(B) Any one-time or ad hoc payment made to a member, but not to all similarly situated members in the member’s grade or class.

(C) Any payment that is made solely due to the termination of the member’s employment, but is received by the member while employed, except those payments that do not exceed what is earned and payable in each 12-month period during the final average salary period regardless of when reported or paid.

(2) Payments for unused vacation, annual leave, personal leave, sick leave, or compensatory time off, however denominated, whether paid in a lump sum or otherwise, in an amount that exceeds that which may be earned and payable in each 12-month period during the final average salary period, regardless of when reported or paid.

(3) Payments for additional services rendered outside of normal working hours, whether paid in a lump sum or otherwise.

(4) Payments made at the termination of employment, except those payments that do not exceed what is earned and payable in each 12-month period during the final average salary period, regardless of when reported or paid.”

[13] Guelfi v. Marin County Employees’ Retirement Assn., 145 Cal. App. 3d 297 (1st Dist. 1983).

[14] 16 Cal. 4th 483 (1997).

[15] 110 Cal. App. 4th 426 (1st Dist. 2003).

[16] 2 Cal. App. 5th 674 (1st Dist. 2016).





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