People v. Lofchie ( 2014 )

Filed 8/27/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE, B248383
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BA393121)
v.
MICHAEL LOFCHIE,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County. Clifford L.
Klein. Affirmed.
Jackie Lacey, District Attorney, Phyllis C. Asayama and Mathew Brown, Deputy
District Attorneys for Plaintiff and Appellant.
Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, Gary S.
Lincenberg and Benjamin D. Lichtman for Defendant and Respondent.
Crowel & Moring and J. Daniel Sharp; University of California Los Angeles
Office of Legal Affairs and Kevin S. Reed; University of California Los Angeles Office
of the General Counsel and Charles F. Robinson, Karen J. Petrulakis, Stephen P. Morrell,
Mark Morodomi, and Elizabeth C. Yap as Amicus Curiae on behalf of Defendant and
Respondent.
The issue presented in this case is whether a University of California1 faculty
member may be criminally prosecuted under Government Code section 10902 for
participating in a decision to hire his wife as a program assistant for a four-week summer
study abroad course. We conclude that he may not, and for reasons we discuss affirm the
trial court’s order dismissing the information under Penal Code section 995.
BACKGROUND
Defendant Michael Lofchie (Lofchie) has been a faculty member at the University
of California at Los Angeles since 1964. He was chairman of the political science
department in 2008. In July 2008, Lofchie taught a four-week summer session abroad
course and participated in a decision to hire his wife, Kelly Comras Lofchie (Comras), as
a program assistant for the 2008 summer session. Comras was hired by the University’s
Office of Summer Sessions and was paid $3,100 plus a per diem for her expenses.
Richard Anderson, another professor in the political science department, also
taught a class in the University’s 2008 summer session. When Anderson learned that
Comras had been hired as a program assistant, he objected, first to Lofchie, and then to
the person who succeeded Lofchie as chairman of the political science department.
Anderson also filed an anonymous whistleblower complaint and met with the
University’s director of compliance and the dean of the social science division. When the
University’s administration rejected his complaint, Anderson brought the matter to the
attention of the Los Angeles County District Attorney.
The district attorney, on behalf of the People of the State of California,3 filed an
information charging Lofchie with a felony violation of section 1090, alleging he was
“financially interested” in a contract made by him in his official capacity to hire Comras
as a program assistant in the summer of 2008. Lofchie filed a motion under Penal Code
1
Hereinafter, the University of California, or simply, the University.
2
All further statutory references are to the Government Code, unless stated
otherwise. Section 1090 may be referred to as section 1090 or Government Code section
1090.
3
The district attorney is referred to hereinafter as the People.
2
section 995 to set aside the information on various grounds, including that article IX,
section 9 of the California Constitution (hereafter article IX, section 9 or Cal. Const., art.
IX, § 9) precludes the Legislature from regulating the employment practices of the
University of California through Government Code section 1090; that section 1090 does
not apply to a University of California professor; and that a more specific statute, Public
Contract Code section 10516, preempts application of Government Code section 1090.
The People opposed the motion.
After hearing argument from the parties, the trial court granted Lofchie’s motion
to set aside the information. This appeal followed.
THE PARTIES’ CONTENTIONS
Lofchie and the Regents of the University of California (the Regents), to whom we
granted leave to file an amicus brief, both argue that section 1090 does not apply to the
University because it is not the “state” within the meaning of the statute, but rather a
constitutionally created public trust subject to legislative control in only specifically
enumerated areas that do not include internal hiring decisions. The Regents further
contend University of California employees are already subject to internal conflict of
interest policies, including policies that address conflicts of interest in decisions involving
spouses and family members, and that the district attorney’s expansive interpretation of
section 1090 would render the statute an unconstitutional interference with university
autonomy. Lofchie also contends the People forfeited the right to argue on appeal that he
is a state employee because they took the opposite position in the trial court below; that
Public Contract Code section 10516 supplants Government Code section 1090; and
section 1090 is unconstitutionally vague as applied to him.
The People contend they did not forfeit any argument that the University of
California is a state entity and Lofchie is an employee of the “state” within the meaning
of section 1090. The People further contend article IX, section 9 does not exempt the
University from regulation under Government Code section 1090, and Public Contract
Code section 10516 does not preclude application of section 1090.
3
DISCUSSION
I. Forfeiture
Lofchie argues that the doctrines of waiver and invited error preclude the People
from pursuing this appeal because they expressly conceded in the trial court below that he
is not a state employee. The doctrine of waiver precludes a party from changing its
position and adopting a new and different theory on appeal because “‘“to do so would not
only be unfair to the trial court, but manifestly unjust to the opposing party.”’” (Saville v.
Sierra College (2005) 133 Cal. App. 4th 857, 873.) “Under the doctrine of invited error,
when a party by its own conduct induces the commission of error, it may not claim on
appeal that the judgment should be reversed because of that error. [Citations.]” (Mary
M. v. City of Los Angeles (1991) 54 Cal. 3d 202, 212.)
The People acknowledge that they took inconsistent positions in the proceedings
below regarding Lofchie’s employment status, at times conceding he is not a “state
employee,” but rather a “public employee” subject to section 1090. They argue,
however, that both Lofchie and the trial court understood the People’s position to be that
University employees such as Lofchie are subject to section 1090, that Lofchie suffered
no prejudice, and that there was no invited error on the part of the trial court.
We agree that there was neither prejudice nor invited error. Lofchie successfully
opposed the People’s arguments in the trial court below that section 1090 applied to him
as either a “state employee” or a “public employee.” The trial court’s memorandum of
decision expressly rejects the People’s argument that University of California employees
should be included as employees of the “state” within the meaning of section 1090.
Finding no grounds for forfeiture, we address the merits of the parties’
contentions.
II. The legal framework
A. Section 1090
Section 1090 provides:
“Members of the Legislature, state, county, district, judicial district,
and city officers or employees shall not be financially interested in any
4
contract made by them in their official capacity, or by any body or board of
which they are members. Nor shall any state, county, district, judicial
district, and city officers or employees be purchasers at any state sale or
vendors at any purchase made by them in their official capacity.
“As used in this article, ‘district’ means any agency of the state
formed pursuant to general law or special act, for the local performance of
governmental or proprietary functions within limited boundaries.”
Section 1090 “represents the Legislature’s decision to codify the common law rule
prohibiting public officials from having a personal financial interest in the contracts they
form in their official capacities. [Citation.]” (People v. Wong (2010) 186 Cal. App. 4th
1433, 1450.) A contract is made for purposes of section 1090 if the public official “had
the opportunity to, and did, influence execution [of the contract] directly or indirectly to
promote his personal interests. [Citation.]” (People v. Sobel (1974) 40 Cal. App. 3d 1046,
1052.) A public official can violate the statute even if he did not participate in the
execution of the contract. (Ibid.)
There are both civil and criminal remedies for violations of section 1090.
Contracts made in violation of the statute may be voided by any party, except the
interested party. (§ 1092.) Persons who willfully violate section 1090 are subject to
criminal sanctions, including a fine of up to $1,000, imprisonment in state prison, and
disqualification from holding any office in the state. (§ 1097.)4
4
Criminal sanctions for violation of section 1090 are set forth in section 1097,
which states: “Every officer or person prohibited by the laws of this state from making or
being interested in contracts, or from becoming a vendor or purchaser at sales, or from
purchasing scrip, or other evidences of indebtedness, including any member of the
governing board of a school district, who willfully violates any of the provisions of such
laws, is punishable by a fine of not more than one thousand dollars ($1,000), or by
imprisonment in the state prison, and is forever disqualified from holding any office in
this state.”
5
B. Article IX, section 9
The University of California is a public trust established pursuant to article IX,
section 9.5 Article IX, section 9(a)(f) provides in pertinent part:
“(a) The University of California shall constitute a public trust, to be
administered by the existing corporation known as ‘The Regents of the
University of California,’ with full powers of organization and government,
subject only to such legislative control as may be necessary to insure the
security of its funds and compliance with the terms of the endowments of
the university and such competitive bidding procedures as may be made
applicable to the university by statute for the letting of construction
contracts, sales of real property, and purchasing of materials, goods, and
services. . . .”
“[¶] . . . [¶]
“(f) . . . The university shall be entirely independent of all political
or sectarian influence and kept free therefrom in the appointment of its
regents and in the administration of its affairs . . . .”
The California Supreme Court has recognized that “[a]rticle IX, section 9, grants
the regents broad powers to organize and govern the university and limits the
Legislature’s power to regulate either the university or the regents.”6 (San Francisco
Labor Council v. Regents of Univ. of Cal. (1980) 26 Cal. 3d 785, 788 (Labor Council).)
This constitutional grant of power to the Regents includes both quasi-judicial and quasi-
5
The University of California was originally a corporation, with the Regents as its
board of directors. (Stats. 1967-1868, ch. 244, p. 248 [Organic Act of 1868].) During the
first decade of the University’s existence, controversy arose among political factions
seeking to control the University’s governance and curriculum. A “decisive battle” was
waged in the constitutional convention of 1879, culminating in the adoption of article IX,
section 9 and the establishment of the University as a constitutionally created public trust.
(See Horowitz, The Autonomy of the University of California Under the State
Constitution (1977) 25 UCLA L.Rev. 23, 25.)
6
In contrast, the Legislature possesses comprehensive powers of regulation “over
the California State University, which ‘“is subject to full legislative control and has
‘only such autonomy as the Legislature has seen fit to bestow.” [Citation.] . . .’”
(Native American Heritage Com. v. Board of Trustees (1996) 51 Cal. App. 4th 675, 684,
quoting Slivkoff v. Board of Trustees (1977) 69 Cal. App. 3d 394, 401.)
6
legislative powers, according them “virtual autonomy in self-governance.” (Regents of
University of California v. City of Santa Monica (1978) 77 Cal. App. 3d 130, 135.) “‘The
Regents have the general rule-making or policy-making power in regard to the
University . . . and are . . . fully empowered with respect to the organization and
government of the University. . . .’ [Citations.]” (Regents of Univ. of Cal. v. Superior
Court (1970) 3 Cal. 3d 529, 540.) “[P]olicies established by the Regents as matters of
internal regulation may enjoy a status equivalent to that of state statutes [citation].”
(Regents of University of California v. City of Santa Monica, supra, at p. 135; Campbell
v. Regents of University of California (2005) 35 Cal. 4th 311, 321 [Regents’ policy for
handling whistleblower claims under their power to govern and organize the University
is treated as a statute in order to determine whether the exhaustion doctrine applies].)
Courts have recognized not only the broad powers accorded to the Regents to
govern the University of California, but also the University’s “general immunity from
legislative regulation.” (Labor Council, supra, 26 Cal.3d at p. 788.) For example,
courts have found the Regents and the University to be exempt from regulation under
the state prevailing wage law (id. at p. 787; Regents of University of California v. Aubry
(1996) 42 Cal. App. 4th 579, 591), state overtime regulations (Kim v. Regents of
University of Cal. (2000) 80 Cal. App. 4th 160, 166-167), state statutes authorizing
certain employee payroll deductions (California State Employees’ Asso. v. Regents of
University of California (1968) 267 Cal. App. 2d 667), a statute requiring employer
indemnification of employee work uniform expenses (In re Work Uniform Cases (2005)
133 Cal. App. 4th 328, 344), and a Labor Code statute mandating an award of attorney
fees and costs to the prevailing party in an action related to pension fund eligibility,
unpaid wages, or fringe benefits (Goldbaum v. Regents of University of California
(2011) 191 Cal. App. 4th 703, 706 (Goldbaum)).
The Regents and the University of California are not completely exempt from
legislative regulation. As discussed, article IX, section 9 delineates three areas in which
the University and the Regents are subject to legislative control -- insuring the security
of its funds, compliance with the terms of its endowments, and competitive bidding
7
procedures made applicable to the University by statute for awarding construction
contracts, sales of real property, and purchase of materials, goods, and services.
Apart from the forms of legislative control specifically listed in the California
Constitution, there are only three areas in which the Regents and the University of
California are subject to legislative regulation. The California Supreme Court has
enumerated these three areas as follows: “First, the Legislature is vested with the power
of appropriation, preventing the regents from compelling appropriations for salaries.
[Citations.] [¶] Second, it well settled that general police power regulations governing
private persons and corporations may be applied to the university. [Citations.] For
example, workers’ compensation laws applicable to the private sector may be made
applicable to the university. [¶] Third, legislation regulating public agency activity not
generally applicable to the public may be made applicable to the university when the
legislation regulates matters of statewide concern not involving internal university
affairs. [Citation.]” (Labor Council, supra, 26 Cal.3d at p. 789.) Deciding what
constitutes a matter of statewide concern is a judicial, and not a legislative function.
(Regents of University of California v. Aubry, supra, 42 Cal.App.4th at p. 589.)
III. Whether section 1090 applies to the University
The People contend section 1090 falls into the third category of permissive
legislative regulation of the University delineated by the Supreme Court in Labor
Council, because prohibiting state employees from engaging in self-dealing when
contracting on behalf of the state is a matter of “statewide concern.” The People further
contend the term “state” as used in section 1090 includes the University of California
and that Lofchie is a “state” employee. Whether Lofchie and the University come
within the ambit of section 1090 is an issue of statutory interpretation that we review
de novo. (Farahani v. San Diego Community College Dist. (2009) 175 Cal. App. 4th
1486, 1491.) Whether the University is constitutionally immune from legislative
regulation under section 1090 is a legal issue also subject to our independent review.
(Goldbaum, supra, 191 Cal.App.4th at p. 710.) These two legal issues are entwined
with one another.
8
A. Statutory construction analysis
1. General principles
The fundamental rule of statutory construction is that the court should ascertain
the intent of the Legislature so as to effectuate the purpose of the law. (Select Base
Materials v. Board of Equalization (1959) 51 Cal. 2d 640, 645 (Select Base).) In
determining the intent of the Legislature, we first examine the words of the statute itself.
(California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal. 3d 692,
698.) If the language of the statute is clear and unambiguous, there is no need for
statutory construction. (Lungren v. Deukmejian (1988) 45 Cal. 3d 727, 735.) However,
“the ‘plain meaning’ rule does not prohibit a court from determining whether the literal
meaning of a statute comports with its purpose.” (Ibid.) “‘We must select the
construction that comports most closely with the apparent intent of the Legislature, with
a view to promoting rather than defeating the general purpose of the statute, and avoid
an interpretation that would lead to absurd consequences.’ [Citation.]” (People v.
Coronado (1995) 12 Cal. 4th 145, 151.) The Legislative purpose “will not be sacrificed
to a literal construction” of any part of the statute. (Select Base, at p. 645.)
2. Neither the plain language nor the legislative history of section 1090
reflect an intent to include the University of California
Section 1090 does not define the term “state.” The term is defined elsewhere in
sections of the Government Code that govern the construction of that code. (§§ 5, 18.)
Section 18 defines “State” as “the State of California, unless applied to different parts of
the United States,” in which case “it includes the District of Columbia and the
territories.” (§ 18.) But that definition is unhelpful in determining whether the
University of California is considered the “state” and whether a University professor is a
“state employee” within the meaning of section 1090.
Because the language of section 1090 provides no definitive answer as to whether
it applies to the University of California, we turn to the legislative history and the
purposes to be achieved by the statute. (People v. Coronado, supra, 12 Cal.4th at p.
151.) In addition, the statute must be construed “ ‘with reference to the whole system of
9
law of which it is a part so that all may be harmonized and have effect.’ [Citation.]”
(Select Base, supra, 51 Cal.2d at p. 645.)
The legislative history for section 1090 contains no expression of intent to include
the University of California and its employees within the ambit of the statute. The
predecessor statute to section 1090 was enacted in 1851, before the University of
California existed,7 and applied to government officials only. It prohibited “any
government official or legislator from being ‘interested in any Contract made by such
Officer or Legislature of which he is a member . . . in the discharge of his official duties.’
[Citations.]” (Lexin v. Superior Court (2010) 47 Cal. 4th 1050, 1072, fn. 10, quoting
Stats. 1851, ch. 136, § 2, p. 522.) That prohibition was later codified in former section
920 of the Political Code and, in 1943, moved with only minor changes to the
Government Code. (Lexin, at p. 1072.) When the Legislature added the term
“employee” to section 1090 in 1963 (Stats. 1963, ch. 2172, p. 4559), the Legislative
Council’s Digest described the statute as a proscription on governmental actors only:
“Provides that employees, as well as officers of various governmental, judicial and
legislative bodies, shall not be interested in any contract executed by them in official
capacity.” (Legis. Counsel’s Dig., Assem. Bill No. 402 (1963 Reg. Sess.) 2 Stats. 1963,
Summary Dig., p. 151.) Nothing in the history of section 1090 refers to the University of
California or its employees.
The People argue that the language of section 1090 has been interpreted broadly in
order to uphold the strong public policy against public officials having a personal
financial interest in contracts they form in their official capacities, and that the terms
“state” and “state employee” should therefore be broadly construed to include the
University and its employees. It is true that section 1090 has been construed broadly with
respect to the scope of contractual or financial interests it covers (see, e.g., Stigall v. Taft
(1962) 58 Cal. 2d 565, 571 [prohibited interest can include not only execution of contract,
7
The University of California was established by the Organic Act of 1868. (Stats.
1867-1868, ch. 244, p. 248.)
10
but also planning and preliminary discussions]; People v. Honig (1996) 48 Cal. App. 4th
289, 322-323 [prohibited financial interest can be direct or indirect]), but not with respect
to the scope of individuals covered. (See Klistoff v. Superior Court (2007) 157
Cal. App. 4th 469, 480, fn. 2 [section 1090’s “application is expressly restricted to the
public officials enumerated in that statute”].)
In People v. Christiansen (2013) 216 Cal. App. 4th 1181, Division One of this court
rejected an argument similar to the one advanced by the People in this case that the term
“employees” as used in section 1090 should be broadly construed to include independent
contractors. As support for its expansive interpretation of this statutory term, the
Attorney General in Christiansen cited cases in which civil liability had been imposed on
independent contractors under section 1090. (Id. at p. 1189.) The court in Christiansen
“express[ed] no opinion on the soundness of those opinions in the civil context,” but held
that “expansion of the statutory term ‘employees’ to apply to independent contractors
does not apply to criminal prosecutions for violation of section 1090” absent a clear and
unequivocal intent by the Legislature to do so. (Id. at pp. 1189, 1190.)
Given the absence of clear and unequivocal legislative intent to include the
University of California within the ambit of section 1090, we, like the court in
Christiansen, will not judicially expand the scope of the statute to include the University
and its employees.
As support for their argument that section 1090 applies to the University, the
People cite other statutory schemes, such as the Political Reform Act, section 11000, and
the California Environmental Quality Act, which apply to a “state agency” and which
have been applied to the University even though the University is not expressly included
in the statutory definitions for “state agency.” That other statutory schemes, with
different statutory definitions, have been applied to the University is not a valid basis for
concluding that section 1090 applies in the instant case.8
8
The definition of “state agency” as used in section 11000 is expressly limited to
title 2 of the Government Code. Section 1090 appears in title 1. (§ 11000, subd. (a).)
11
3. There is no case law applying section 1090 to the University
There is no case law applying section 1090 to the University of California or its
employees. The People cite People v. Darby (1952) 114 Cal. App. 2d 412 (Darby) and
People v. Elliott (1953) 115 Cal. App. 2d 410 (Elliott) as support for the argument that the
University is the “state” and Lofchie a “state employee” within the meaning of section
1090, but both of those cases are distinguishable.
Darby held that an elected member of the Los Angeles Board of Education was
both a “City officer” and a “state officer” under section 1090. The elected board member
was a “City officer” because the Los Angeles City Charter so provided. He was also a
“state officer” because the City of Los Angeles was empowered by the California
Constitution to determine the manner in which Board members were elected or
appointed, as well as the duration of their terms, qualifications, compensation, and
removal. The court in Darby reasoned: “An officer is a state officer if the tasks
performed by him are accomplished for and on behalf of the state notwithstanding the
fact that his duties were restricted to a particular geographical portion of the state.
[Citation.] The school district is a state agency and its board members are state officers.”
(Darby, supra, 114 Cal.App.2d at p. 423.)
The court in Elliott reached the same conclusion with regard to members of the
City of Los Angeles School Board, noting that “[t]he term ‘state officers’ is not limited to
officers whose jurisdiction is coextensive with the state but applies generally to persons
clothed with functions which affect the public and duties assigned to them by state laws.
. . . [¶] The matter of education is of statewide concern and is one of the responsibilities
of the state government.” (Elliott, supra, 115 Cal.App.2d at p. 415.)
Unlike the City of Los Angeles in Darby and Elliott, the University of California
is not a political subdivision of the state invested with a portion of the state’s
governmental power -- it is a public trust. (Cal. Const., art. IX, § 9.) The purpose of
designating the University as a public trust was to insulate it from state government,
ensuring that the University and its faculty would be “entirely independent of all political
or sectarian influence.” (Cal. Const., art. IX, § 9(f).) Our Supreme Court has recognized
12
the “unique constitutional status of the University of California” (Miklosy v. Regents of
University of California (2008) 44 Cal. 4th 876, 889), distinguishing it from other state
agencies that are subject to the Legislature’s comprehensive power of regulation. Darby
and Eliott are thus distinguishable.
4. The Williamson rule does not apply
Lofchie argues that section 1090 must be construed with reference to Public
Contract Code section 10516, a statute he claims allows University professors to make
contracts in which they have a financial interest. Lofchie further argues that the more
specific provisions of Public Contract Code section 10516 supplant the general
provisions of Government Code section 1090 under a principle of statutory interpretation
known as the Williamson rule, based on the Supreme Court’s decision in In re
Williamson (1954) 43 Cal. 2d 651.
“Under the Williamson rule, if a general statute includes the same conduct as a
special statute, the court infers that the Legislature intended that conduct to be prosecuted
exclusively under the special statute. In effect, the special statute is interpreted as
creating an exception to the general statute for conduct that otherwise could be
prosecuted under either statute. [Citation.] ‘The rule is not one of constitutional or
statutory mandate, but serves as an aid to judicial interpretation when two statutes
conflict.’ [Citation.]” (People v. Murphy (2011) 52 Cal. 4th 81, 86.) As we discuss, the
Williamson rule does not apply because section 1090 and Public Contract Code section
10516 can be interpreted such that the two statutes do not conflict.
Public Contract Code section 10516 provides:
“No officer or employee of the University of California shall engage
in any employment, activity, or enterprise from which the officer or
employee receives compensation or in which the officer or employee has a
financial interest if that employment, activity, or enterprise is sponsored or
funded, or sponsored and funded, by any university department through or
by a university contract unless the employment, activity, or enterprise is
within the course and scope of the officer’s or employee’s regular
university employment. No officer or employee in the university shall
contract on his or her own individual behalf as an independent contractor
with any university department to provide services or goods. This section
13
shall not apply to officers or employees of the university with teaching or
research responsibilities, nor shall it apply to student employees for
payment for additional campus activities or engagements outside of the
scope of their primary university employment.”
An officer or employee of the University “who corruptly performs any official act” in
violation of Public Contract Code section 10516 is guilty of a felony. (Pub. Contract
Code, § 10522.)
Lofchie argues that the exemption accorded by Public Contract Code section
10516 to “officers or employees of the university with teaching or research
responsibilities” allows a University professor to participate in the making of a University
contract in which he has a financial interest. That exemption, Lofchie claims, conflicts
with section 1090, to the extent section 1090 applies to University employees.
Public Contract Code section 10516 does not proscribe the same conduct as that
prohibited by Government Code section 1090. Public Contract Code section 10516 does
not preclude an employee from making University contracts in which the employee is
financially interested. Rather, it prohibits “any employment, activity, or enterprise” in
which the employee has a financial interest “if that employment, activity, or enterprise is
sponsored or funded . . . by any university department through or by a university contract
. . . .” (Pub. Contract Code, § 10516, italics added.)
The prohibition on contracts imposed by Public Contract Code section 10516
precludes a University employee from contracting “on his or her own individual behalf
as an independent contractor with any university department to provide goods or
services.” (Pub. Contract Code, § 10516, italics added.) Government Code section 1090,
by contrast, applies only to contracts made by state employees “in their official capacity.”
The two statutes do not conflict because they govern different types of conduct.
Public Contract Code section 10516, moreover, must be construed “‘with
reference to the whole system of law of which it is a part.’” (Select Base, supra, 51
Cal.2d at p. 645.) The statute is not part of the Government Code, but rather, part of
chapter 2.1 of division 2 of the Public Contract Code, entitled “University of California
14
Competitive Bidding.” That chapter governs competitive bidding requirements in
University contracts for construction projects; contracts with private architects,
engineering, environmental, and construction management firms; contracts for the sale of
real property owned by the University; and contracts for the procurement of goods,
services, and materials involving an expenditure of more than $50,000. (See Pub.
Contract Code, §§ 10500-10506; 10509; 10510.4-10510.9; 10511-10513.) The $3,100
employment contract at issue here does not come within any of the foregoing categories.
Because Public Contract Code section 10516 and Government Code section 1090
govern different types of conduct, and the two statutes can be construed so that they do
not conflict, the Williamson rule does not apply.
B. Constitutional analysis
Given the University’s “unique constitutional status,” we must construe section
1090 with reference to article IX, section 9 in a manner that harmonizes the statute with
that constitutional mandate. (Select Base, supra, 51 Cal.2d at p. 645.) As discussed,
article IX, section 9 limits the power of the Legislature to intrude upon the administration
of the University of California to three specified areas. It subjects the University to
legislative control only as necessary to ensure the security of its funds, compliance with
the terms of its endowments, and competitive bidding procedures made applicable to the
University by statute for construction contracts, real property sales, and purchases of
materials, goods, and services.
Section 1090 does not regulate the University’s fund security, endowment terms,
or bidding procedures. Of the additional categories of permissible legislative regulation
identified by the Supreme Court in Labor Council, the People concede that section 1090
potentially comes within only one -- legislation regulating public agency activity not
generally applicable to the public. Such legislation may be made applicable to the
University only when it “regulates matters of statewide concern not involving internal
university affairs.” (Labor Council, supra, 26 Cal.3d at p. 789.)
15
1. Case law regarding “matters of statewide concern” versus “internal
university affairs”
The distinction between “matters of statewide concern” subject to legislative
regulation and “university affairs” within the exclusive control of the Regents was first
made by the California Supreme Court in Tolman v. Underhill (1952) 39 Cal. 2d 708
(Tolman).) At issue in Tolman was an oath to uphold the state and federal constitutions
required by article XX, section 3 of the California Constitution and implemented by the
Legislature in Government Code section 18150. (Tolman, at p. 710.) In addition to the
statutory oath, the Regents sought to require University faculty members to execute a
separate oath disclaiming membership in the communist party or in any other
organization advocating overthrow of the government by force or violence. Tolman and
other faculty members were unwilling to sign the University’s additional oath. (Ibid.)
The California Supreme Court invalidated the University’s oath, concluding that
“state legislation has fully occupied the field and that university personnel cannot
properly be required to execute any other oath or declaration relating to loyalty than that
prescribed for all state employees.” (Tolman, supra, 39 Cal.2d at p. 710.) In response to
the Regents’ argument that the state legislation was inapplicable because of the autonomy
conferred on the University under article IX, section 9, the Supreme Court stated: “It is
well settled . . . that laws passed by the Legislature under its general police power will
prevail over regulations made by the regents with regard to matters which are not
exclusively university affairs. [Citations.] There can be no question that the loyalty of
teachers at the university is not merely a matter involving the internal affairs of that
institution but is a subject of general statewide concern.” (Tolman, supra, 39 Cal.2d at p.
712, italics added.) Although the court in Tolman did not specify what matters are
“exclusively university affairs” and subject to the University’s constitutional autonomy,
its holding presumes that such matters exist.
The Supreme Court again addressed the issue of legislative control over the
University of California in Regents of University of Cal. v. Superior Court of Alameda
County (1976) 17 Cal. 3d 533 (Alameda). In that case, the court held the University to be
16
subject to state usury laws when using its endowment funds to make secured loans to
individuals. (Id. at p. 537.) The high court reasoned that by lending money in the
commercial market, the University was “acting in a capacity no different” than a private
individual or corporation and was therefore subject to usury laws applicable to “any
person company or corporation.” (Id. at pp. 536, 537.) Although the court did not
discuss the distinction it had made in Tolman between matters of “statewide concern” and
“university affairs,” nor did it expressly mention article IX, section 9, it did address “the
question whether application of the usury laws to the University would infringe upon
sovereign governmental powers.” (Alameda, supra, at p. 536.) The court concluded
there was no such infringement, but found it unnecessary to “define precisely the extent
of immunity, if any, which the University enjoys.” (Ibid.)
More than 20 years after Tolman, the California Supreme Court revisited the
distinction it had made between matters of “statewide concern” and “university affairs”
by identifying one area of permissible legislative control over the University as follows:
“[L]egislation regulating public agency activity not generally applicable to the public
may be made applicable to the university when the legislation regulates matters of
statewide concern not involving internal university affairs. [Citation.]” (Labor Council,
supra, 26 Cal.3d at p. 789.) The court went on to conclude that a prevailing wage
requirement was a matter of local, rather than statewide concern, under case law
reserving to charter cities and counties the power to determine wages paid to their
employees. (Id. at p. 790.) Applying this principle to the University, the court
determined that “[s]alary determination is as important to the autonomy of the university
as it is to the independence of chartered cities and counties.” (Id. at p. 791.)
After Labor Council, courts of appeal have sought to define the boundaries of
legislative control over the University by identifying those matters that are “of statewide
concern” and those that involve “internal university affairs.” In Coutin v. Lucas (1990)
220 Cal. App. 3d 1016 (Coutin), the court considered the validity of the Legislature’s
repeal of a statute designating the Chief Justice of California as president of the board of
directors of Hastings College of the Law. The appellant in Coutin claimed that the
17
legislative action violated article IX, section 9 because it interfered with the “internal
governance” of the university. (Coutin, at p. 1020.) The court in Coutin disagreed,
concluding that the legislative action involved a matter of statewide concern: “It seems
to us clear that the determination to eliminate the requirement that the Chief Justice of the
state serve as president of the board of trustees of Hastings addresses a matter of
statewide concern . . . . [U]nlike altering the size of the board or adding a student to the
board, a legislative determination that the Chief Justice of California should not be
involved with nonjudicial duties in a nonjudicial public entity, surely constitutes matters
of transcending statewide concern, and is patently not ‘“merely a matter involving the
internal affairs of [the university].”’” (Id. at p. 1026.)
The court in Coutin also sought to reconcile the differences in language used by
the Supreme Court in Tolman and in Labor Council to define the limits of legislative
control over the University: “The phrasing of the limitation in [Labor Council], as
matters of statewide concern ‘not involving internal university affairs’. . . does not mean
that the university or one of its colleges is immune from the effects of legislation of
paramount state concern merely because that legislation may in some fashion affect the
institution’s internal affairs. The Supreme Court in [Labor Council] relied upon
[Tolman] as authority for this formulation of an area of legitimate legislation regulation.
Tolman recognized the hegemony of the legislature in matters of statewide concern
‘which are not exclusively university affairs.’ [Citation.] Tolman nowhere indicates that
legislation on matters of manifest statewide concern will be inapplicable to the university
merely because it also relates to the internal affairs of the university. Indeed, the impact
of Tolman is that legislation on subjects of general statewide importance applies to the
university unless the matter is exclusively internal to the university. [Citations.]”
(Coutin, supra, 220 Cal.App.3d at p. 1026.)
The court in Coutin then applied one commentator’s suggested approach for
determining what matters constitute “exclusively University affairs” within the Regents’
exclusive governing powers, using the following three factors: “‘(1) the centrality of the
subject matter to the functioning of the University as a university; (2) the degree of
18
impairment of the Regents’ ‘full’ powers of governance; and (3) the interest advanced by
the legislative enactment.’ (Horowitz, supra, 25 UCLA L.Rev. at p. 36.)” (Coutin,
supra, 220 Cal.App.3d at p. 1027.) The court concluded: “Analyzing the matter in this
manner, we can readily observe that elimination of the designation of the Chief Justice to
serve ex officio as president of the board of Hastings is not exclusively an internal affair
of Hastings. Moreover, repeal of that legislation does not affect significantly, if at all, the
administration of Hastings or its academic activities. Nor, as far as we can see, does it
significantly affect internal governance of Hastings.” (Ibid.)
Other courts have sought to establish the boundaries of legislative regulation over
the University by identifying those matters that are exclusively university affairs. Courts
have recognized, for example, that “the evaluation of scholarship and the grant or denial
of tenure or promotion, unlike the ascertainment of loyalty, is a defining act of singular
importance to an academic institution,” precluding application of a statute that would
require the University to disclose documents generated during the faculty peer review
process. (Scharf v. Regents of University of California (1991) 234 Cal. App. 3d 1393,
1405, fn. omitted.) Courts have refused to apply a statutory ban against the corporate
practice of medicine because doing so “would infringe upon the operation of [the
University’s] medical center as a teaching and research facility -- its core governmental
function, its raison d’etre. [Citations.]” (California Medical Assn. v. Regents of
University of California (2000) 79 Cal. App. 4th 542, 548, fn. omitted.) Courts have also
concluded that a University construction project for student and staff housing was an
internal university affair not subject to state prevailing wage laws because “[e]nsuring
access to qualified students who otherwise could not attend, and securing the services of
outstanding faculty and staff who otherwise might decline to accept or continue
employment, is at the heart of UC’s educational function . . . .” (Regents of University of
California v. Aubry, supra, 42 Cal.App.4th at p. 590.)
19
2. This contract does not involve a matter of statewide concern and its
application impinges upon exclusively internal University affairs
Under the principles set forth above, we cannot conclude that section 1090 as
applied to the University in the circumstances presented here involves a matter of
statewide concern. Determining what policies and procedures should govern conflicts of
interest in the University’s decisions to hire program assistants for a four-week summer
study abroad course is not a matter of “transcending statewide concern.” (Coutin, supra,
220 Cal.App.3d at p. 1026.)
Application of section 1090 to criminally sanction Lofchie infringes upon the
Regents’ and the University’s exclusive powers of self-governance. In the exercise of its
“full powers of organization and government” (Cal. Const., art. IX, § 9), the University
has adopted detailed conflict of interest policies, including policies and procedures
governing the employment of relatives and near relatives of University employees.9
Among these policies is a general restriction on staff participation in employment
decisions involving a spouse or other near relative. The policy states: “A member of the
University staff shall not participate in the processes of review and decision-making on
any matter concerning appointment, promotion, salary, retention, or termination of a near
relative.” Violation of the University’s conflict of interest policy is also a violation of the
University’s faculty code of conduct and subjects the violator to potential discipline,
including written censure, suspension without pay, demotion, or dismissal. The
University’s policies accord its administration flexibility, however, in determining
whether a violation has occurred and in sanctioning any violation. Disputes over the
existence of a violation, or appropriate discipline, are “resolved on a case-by-case basis.”
The University concluded that Lofchie’s participation in the decision to hire
Comras as a summer study abroad program assistant did not constitute a violation
warranting discipline under its conflict of interest policy and its faculty code of conduct.
9
We granted the Regents’ request that we take judicial notice of the University’s
conflict of interest code, faculty code of conduct, code of ethics, and its policies,
guidelines, and personnel manuals implementing those codes.
20
Allowing the People to sanction Lofchie under section 1090 would infringe upon not
only the University’s conflict of interest policies, but its internal disciplinary policies as
well. These policies “enjoy a status equivalent to that of state statutes. [Citation.]”
(Regents of University of California v. City of Santa Monica, supra, 77 Cal.App.3d at p.
135.) Their impairment would substantially interfere with the Regents’ full powers of
governance over University affairs.
Moreover, it is far from clear whether applying section 1090 to the University in
the circumstances presented here would advance the legislative interests underlying the
statute. As discussed, neither the plain language of section 1090 nor its legislative history
contains an expression of intent to include the University of California within the ambit
of the statute.
3. Municipal home rule cases do not apply
The People concede that section 1090 “unquestionably intrudes somewhat into the
[University’s] affairs,” but argue that such intrusion does not preclude the statute’s
application. They claim the instant case is analogous to municipal “home rule” cases
determining when a state statute preempts an ordinance adopted by a charter city or
county and urge us to adopt the analysis courts have applied in such cases to distinguish
between “municipal affairs” and matters of “statewide concern.”
Charter cities have powers of self-governance similar to those held by the
University of California, in that they “are specifically authorized by our state Constitution
to govern themselves, free of state legislative intrusion, as to those matters deemed
municipal affairs.” (State Building & Construction Trades Council of California v. City
of Vista (2012) 54 Cal. 4th 547, 555 (State Building).) Article XI, section 5, subdivision
(a) of the California Constitution provides: “It shall be competent in any city charter to
provide that the city governed thereunder may make and enforce all ordinances and
regulations in respect to municipal affairs, subject only to restrictions and limitations
provided in their several charters and in respect to other matters they shall be subject to
general laws. City charters adopted pursuant to this Constitution shall supersede any
21
existing charter, and with respect to municipal affairs shall supersede all laws
inconsistent therewith.”
The California Supreme Court has set forth the following four-part analysis for
determining whether or not a matter falls within a charter city’s constitutional home rule
authority: “First, a court must determine whether the city ordinance at issue regulates an
activity that can be characterized as a ‘municipal affair.’ [Citation.] Second, the court
‘must satisfy itself that the case presents an actual conflict between [local and state law].’
[Citation.] Third, the court must decide whether the state law addresses a matter of
‘statewide concern.’ [Citation.] Finally, the court must determine whether the law is
‘reasonably related to . . . resolution’ of that concern [citation] and ‘narrowly tailored’ to
avoid unnecessary interference in local governance [citation]. ‘If . . . the court is
persuaded that the subject of the state statute is one of statewide concern and that the
statute is reasonably related to its resolution [and not unduly broad in its sweep], then the
conflicting charter city measure ceases to be a “municipal affair” pro tanto and the
Legislature is not prohibited by article XI, section 5(a), from addressing the statewide
dimension by its own tailored enactments.’ [Citation.]” (State Building, supra, 54
Cal.4th at p. 556, quoting California Federal Savings & Loan Assn. v. City of Los
Angeles (1991) 54 Cal. 3d 1, 16, 17, 24 (California Federal).)
The People urge us to apply the municipal home rule analysis to this case to
determine whether section 1090 addresses a matter of “statewide concern” and therefore
supplants the University’s powers of self-governance over “internal university affairs.”
Because the constitutional autonomy granted to the University under article IX, section 9
is substantially greater than that accorded to charter cities under article XI, section 5, we
decline to do so.
Article XI, section 5 of the California Constitution grants charter cities sovereignty
over matters deemed to be “municipal affairs,” but recognizes state legislative
supremacy over matters not within the ambit of that phrase. (California Federal, supra,
54 Cal.3d at p. 13.) It expressly states that “in respect to other matters,” charter cities
“shall be subject to general laws.” (Cal. Const., art. XI, § 5(a).) Even as to matters
22
involving “municipal affairs,” a charter city’s enactments supersede only those state
laws that are “inconsistent therewith.” (Ibid.) In contrast, article IX, section 9 limits
legislative control over the University to three areas -- fund security, endowment terms,
and competitive bidding -- and grants the University “full powers” of governance in all
other areas. (Cal. Const., art. IX, § 9.) The University’s policies concerning matters of
internal regulation “enjoy a status equivalent to that of state statutes” (Regents of
University of California v. City of Santa Monica, supra, 77 Cal.App.3d at p. 135), and
unlike charter city enactments, need not be “inconsistent” with a state law in order to
supplant that law. As one commentator has observed, “although the general approach in
some of the municipal affairs cases suggests elements of an approach to interpretation of
article IX, section 9, the conclusion does not follow that decisions about the scope of
‘municipal affairs’ would necessarily define the scope of ‘University affairs.’”
(Horowitz, supra, 25 UCLA L.Rev. at p. 36.) This is because “a decision that a matter is
not a municipal affair because of the need for uniformity in regulation of the matter
throughout the state” has little potential relevance to article IX, section 9, which “by
definition contemplates that regulation of an exclusively University affair by the Regents
may differ from regulation by the Legislature of that matter as applied other than to the
University.” (Horowitz, at p. 36.) The municipal home rule analysis is therefore
inapplicable to the University of California.
CONCLUSION
The matter presented here is not one of statewide concern. Allowing the People to
prosecute Lofchie under section 1090 would impair the Regents’ ability to govern and
would contravene article IX section 9 of the California Constitution.10
10
In view of our holding, we need not address Lofchie’s arguments that the
information is barred because section 1090 is unconstitutionally vague as applied to him
or that we should apply the rule of lenity to preclude criminal prosecution in this case.
(See Dunn v. United States (1979) 442 U.S. 100, 112 [“to ensure that a legislature speaks
with special clarity when marking the boundaries of criminal conduct, courts must
decline to impose punishment for actions that are not ‘plainly and unmistakably’
proscribed”].)
23
DISPOSITION
The order dismissing the information is affirmed.
CERTIFIED FOR PUBLICATION
____________________________, J.
CHAVEZ
We concur:
__________________________, P. J.
BOREN
__________________________, J.*
FERNS
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
24