State Bldg. and Trades Council v. Vista: Supreme Court Holds that State's Prevailing Wage Law Does Not Apply to Charter Cities

The California Supreme Court today issued its decision in State Building and Construction Trades Council of California, AFL-CIO v. City of Vista (7/2/12) --- Cal.4th ---. The Court affirmed the lower court's holding that a charter city need not comply with the State's prevailing wage law. Here is the opinion's introductory section, which states the issue and the holding pretty clearly:

A charter city entered into certain contracts for the construction of public buildings. A federation of labor unions then petitioned the superior court for a peremptory writ of mandate, asserting that the city must comply with California's prevailing wage law notwithstanding local ordinances stating otherwise. The prevailing wage law requires that certain minimum wage levels be paid to contract workers constructing public works. 

Under the state Constitution, the ordinances of charter cities supersede state law with respect to “municipal affairs” (Cal. Const., art. XI, § 5), but state law is supreme with respect to matters of “statewide concern” (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 17. Here, petitioner contends that the subject matter of the state's prevailing wage law is a “statewide concern” over which the state has primary legislative authority. (Ibid.) The city responds that the matter is a municipal affair and therefore governed by its local ordinances. We agree with the city. 

The opinion was written by Justice Kennard and joined by Chief Justice Cantil-Sakauye and Justices Baxter, Chin, and Corrigan. Justice Werdegar wrote a dissent in which Justice Lui joined, and Justice Lui wrote a dissent in which Justice Werdegar joined. The dissents are interesting.  Here is the introductory section from Justice Werdegar's:  

This case requires that we resolve a dispute between the Legislature and a charter city, two entities granted specific lawmaking authority by our state Constitution. On the one hand, “[t]he legislative power of this State is vested in the California Legislature which consists of the Senate and Assembly....” (Cal. Const., art. IV, § 1.) The state Legislature wields “the entire law-making authority of the state, except the people's right of initiative and referendum” and “may exercise any and all legislative powers which are not expressly or by necessary implication denied to it by the Constitution.” On the other hand, under what is alternately called the “municipal home rule” or “municipal affairs” doctrine, charter cities are empowered to “make and enforce all ordinances and regulations in respect to municipal affairs,” and such ordinances “shall supersede all laws inconsistent therewith.” (Cal. Const., art. XI, § 5, subd. (a).)  

In this case, the Legislature exercised its lawmaking powers to enact sections 1720 to 1861 of the Labor Code, commonly referred to as the prevailing wage law, which generally requires payment of the prevailing wage to workers on publicly funded construction projects. By contrast, defendant City of Vista (Vista), a charter city, exercised its lawmaking powers to enact an ordinance that (in most instances) prohibits city contracts from requiring the payment of the prevailing wage. In this area of overlapping lawmaking authority, a constitutional tension exists. 

This court is the final arbiter of the meaning of the California Constitution. Unlike when we interpret state statutory law or federal constitutional law, where our decisions can be overturned by, respectively, the Legislature or the United States Supreme Court, we are the last word on the meaning of the state Constitution. If we err, our decision can be corrected only by an amendment to that Constitution. Accordingly, when approaching a dispute between the Legislature and a charter city under the municipal affairs doctrine, we are charged with a solemn and delicate obligation to fairly balance conflicting interests and reasonably resolve the tension inherent in such disputes. 

The majority's approach to this case is neither fair nor reasonable. Instead, the majority goes astray by making a series of analytical missteps. First, in concluding Vista's ordinance comes within the protected zone of municipal affairs, the majority places unjustified weight on Vista's fiscal interest in saving money on the construction of public buildings, and relies on an outmoded Depression Era decision that interpreted a different law (maj. opn., ante, at pp. 11–12) long ago eclipsed by more modern economic ideas. 

Second, by failing to appreciate the full impact of the prevailing wage law, the majority significantly undervalues the statewide economic concerns the law addresses, and fails to accord appropriate weight to the Legislature's express findings and declarations that the prevailing wage law should apply to charter cities and that it addresses a matter of statewide concern. Finally, the majority fails to recognize the difference—critical in the context of municipal governance and independence—between state regulations affecting public employees and those affecting private employees who contract with the city.

The dissent brings to mind Justice Werdegar's concurring opinion in Brinker v. Superior Court, in which only Justice Liu joined.  It appears that we are starting to see coalition lines being drawn on this new Court.  It will be interesting to see how these lines develop in the coming years.  

The opinion is available here.