Bernard v. City of Oakland (202 Cal. App. 4th 1553, 2012)

Opinion

BANKE, J.

I. Introduction

Plaintiffs in these cases, retired firefighters or their surviving spouses, contend the City of Oakland and Union City were required to make additional payments toward their health care coverage on January 1, 2007, pursuant to an amendment to the Public Employees’ Medical and Hospital Care Act (PEMHCA; Gov. Code, § 22750 et seq.). The cities and the California Public Employees’ Retirement System (CalPERS), which administers the PEMHCA, maintain they properly implemented the new formula as of January 1, 2007, resulting in increased payments being made in 2008. The trial court agreed with the cities and CalPERS, denied mandamus relief and dismissed the actions. We affirm.

II. Background

The City of Oakland and Union City are contractually obligated to make health care coverage available to current and retired employees under memoranda of understanding with various unions. The cities provide for such coverage through contracts with CalPERS under the PEMHCA (Gov. Code, § 22750 et seq.). Oakland contracted with CalPERS in 1989, and Union City did so in 2000.

In September 2006, the Legislature amended the PEMHCA and, specifically section 22892, subdivision (c). (Stats. 2006, ch. 862, § 1.) Prior to the amendment, contracting agencies, like the cities, could choose to contribute less toward retirees’ health care premiums than toward employees’ premiums. But such agencies were also required to increase the amounts they paid toward retirees’ health care premiums by 5 percent each year, until the amounts paid toward retiree and current employee health care premiums were equal. (Former § 22892, subd. (c).) The September 2006 amendment to section 22892, subdivision (c), modified the formula used in the “catchup” provision. Contracting agencies now must annually increase the contribution toward retiree health care premiums by “an amount not less than the number of years that the contracting agency has been subject to this subdivision multiplied by 5 percent of the current monthly employer contribution for employees,” but not to exceed $100 annually. (§ 22892, subd. (c).) The amendment was not passed as urgency legislation, and thus became effective January 1, 2007. (Cal. Const., art. IV, § 8, subd. (c), par. (1).)

CalPERS issued two circular letters to contracting agencies about the new statutory provision, explaining the new catchup formula should be applied during 2007 to calculate contributions to health care premiums, resulting in additional payments being made at “the beginning of 2008.” Pursuant to the circular letters, the City of Oakland and Union City applied the new formula in their 2007 calculations to determine the amount they would contribute to retiree health care premiums and began paying the increased catchup amounts on January 1, 2008.

Plaintiffs filed these actions seeking writs of mandamus under Code of Civil Procedure section 1085 and other relief on January 2, 2008 (City of Oakland), and March 3, 2008 (Union City). They asserted the cities should have begun paying the increased amounts called for by the amended language on January 1, 2007, rather than on January 1, 2008. The trial court denied the petitions and dismissed the actions by written order dated January 11, 2010.

III. Discussion

A. Standard of Review

“A traditional writ of mandate under Code of Civil Procedure section 1085 is a method for compelling a public entity to perform a legal and usually ministerial duty. [Citation.] The trial court reviews an administrative action pursuant to Code of Civil Procedure section 1085 to determine whether the agency’s action was arbitrary, capricious, or entirely lacking in evidentiary support, contrary to established public policy, unlawful, procedurally unfair, or whether the agency failed to follow the procedure and give the notices the law requires.” (Klajic v. Castaic Lake Water Agency (2001) 90 Cal.App.4th 987, 995 [109 Cal.Rptr.2d 454], fn. omitted; accord, Shelden v. Marin County Employees’ Retirement Assn. (2010) 189 Cal.App.4th 458, 463 [116 Cal.Rptr.3d 883] (Shelden).) The court reviews legal questions, including questions of statutory construction, de novo. (See Shelden, supra, at p. 463; Clovis Unified School Dist. v. Chiang (2010) 188 Cal.App.4th 794, 798 [116 Cal.Rptr.3d 33].)

Appellate review in an ordinary mandamus proceeding “ ‘is ordinarily confined to an inquiry as to whether the findings and judgment of the trial court are supported by substantial evidence.’ ” (Agosto, supra, 189 Cal.App.4th at p. 336, quoting Saathoff v. City of San Diego (1995) 35 Cal.App.4th 697, 700 [41 Cal.Rptr.2d 352].) However, a Court of Appeal engages in de novo review “ ‘when the case involves resolution of questions of law where the facts are undisputed.’ ” (Agosto, at p. 336, quoting Saathoff, at p. 700; accord, Schram Construction, Inc. v. Regents of University of California (2010) 187 Cal.App.4th 1040, 1051-1052 [114 Cal.Rptr.3d 680].) Accordingly, we review de novo the question of statutory construction presented in this case. (See Margarito v. State Athletic Com. (2010) 189 Cal.App.4th 159, 166 [116 Cal.Rptr.3d 888]; Farahani v. San Diego Community College Dist. (2009) 175 Cal.App.4th 1486, 1491 [96 Cal.Rptr.3d 900].)

B. Overview of the PEMHCA

The purpose of the PEMHCA is to “[e]nable the state to attract and retain qualified employees by providing health benefit plans similar to those commonly provided in private industry” and to “[p]romote increased economy and efficiency.” (§ 22751, subds. (b), (a).) To this end, the board of administration of CalPERS (CalPERS Board) “shall, in accordance with this part, approve health benefit plans, and may contract with carriers offering health benefit plans” for employees and annuitants. (§ 22793; see § 22850.) An “annuitant” is defined as “(a) A person . . . who has retired within 120 days of separation from employment and who receives a retirement allowance under any state or University of California retirement system to which the state was a contributing party.” (§ 22760.) State agencies and local governments may choose to become “contracting agencies” and contract with CalPERS to obtain health benefit plans for their' current employees and annuitants. (§§ 20022, 22768, 22850, subd. (f)(2), 22922.)

If an agency chooses to contract with CalPERS, it must contribute an equal amount to the health care premiums of current employees and annuitants, subject to certain minimum contributions. Section 22892, subdivision (b)(1), thus provides in pertinent part: “The employer contribution shall be an equal amount for both employees and annuitants, but may not be less than the following: [!]... [f] (E) During calendar year 2007, eighty dollars and eighty cents ($80.80) per month. [