California Supreme Court issues two rulings favorable to local governments

The California Supreme Court recently issued a pair of rulings — one on prevailing wages, and another on automatic stays and appeals. Both rulings were consistent with arguments made in friend-of-the-court briefs filed by the League of California Cities. 

Last week, in Daly v. San Bernardino, the California Supreme Court considered whether a judgment unseating an elected official triggers an automatic stay pending an appeal of the decision. In the original case, the trial court held that the appointment of a San Bernardino County Supervisor was unlawful because the county’s appointment process violated the Brown Act. As such, the trial court ordered the removal and replacement of the Supervisor. The county sought a stay, which would have allowed the Supervisor to retain her seat while the county appealed the trial court order. The trial court declined to issue the stay and the county appealed. The Court of Appeal also refused to issue a stay. San Bernardino County then filed a petition for review with the California Supreme Court.

The California Supreme Court reversed and ruled in favor of the county. The court reasoned that because the lower court decision required the county to take an affirmative action — remove and replace the supervisor — the action was automatically stayed during the pendency of the appeal. This holding is consistent with the amicus brief filed by Cal Cities, which argued in part that an automatic stay should be issued pending the appeal in order to maintain the status quo and allow the regular functioning and efficiency of government during litigation.

This week, in Busker v. Wabtech, the California Supreme Court addressed whether publicly funded work performed on trains constituted a “public work” under California’s prevailing wage laws. Wabtech hired the plaintiff to perform work on rail cars as part of a broader project to prevent train collisions. However, the plaintiff was not paid prevailing wages. Other workers — not employed by Wabtech — who installed equipment as part of the broader project in the railyard were paid prevailing wages.

On a certified question from the Ninth Circuit Court of Appeals, the California Supreme Court held that “public works” was limited to construction or installation of structures fixed to real property and that work does not become a “public work” just because it is integral to another activity that itself is a public work. Therefore, the plaintiff was not entitled to a prevailing wage. This holding is consistent with arguments made by Cal Cities — along with other entities — in a local government coalition amicus brief. The California Supreme Court’s ruling narrows the kinds of work for which prevailing wages must be paid and provides local government more certainty when budgeting and planning for publicly funded projects.