Lead Opinion
In this case, we are called upon to determine the appropriate standard of review to be applied by the superior court when a county seeks a writ of mandate (Code Civ. Proc., § 1094.5) to review a decision of its retirement board granting a service-connected disability pension to a deputy sheriif.
We conclude that the independent judgment test applies. When a local government entity is required to contribute to an employee benefit fund of the type involved here (Gov. Code, § 31450 et seq.), an administrative award of those benefits warrants such review under Interstate Brands v. Unemployment Ins. Appeals Bd. (1980)
Facts
The undisputed facts concern real party in interest, Roger L. Carnes (Carnes), who was initially employed as a deputy sheriif by plaintiff County of Alameda (County) in 1969. As a result of his employment, Carnes became a member of the Alameda County Employees’ Retirement Association.
In 1979, Carnes, who was then about 35 years old, applied for a service-connected disability retirement with defendant, Board of Retirement of the Alameda County Employees’ Retirement Association (Board). In his application, he claimed that various work-related auto and slip-and-fall accidents injured his back, and required him to undergo surgery to remove a herniated disc. As a result of the surgery, Carnes assertedly could no longer perform the usual duties of a deputy sheriff.
The Board conducted a hearing at which both sides presented evidence on the issue of Carnes’s alleged permanent incapacitation. Carnes testified that he was incapable of engaging in any strenuous physical activity, and could not perform certain sheriff’s duties, such as those related to pursuing and subduing suspects. Although he recovered well from the surgery, he felt compelled to accept a sales job with another employer which involved only “light” physical work. He further testified that persistent back pain and weakness required him to forego such recreational activities as skiing, racquetball, horseback riding, and performing daily feed-and-care tasks at his horse-boarding business.
The one expert medical opinion introduced on Carnes’s behalf was provided by Dr. Indeck. He stated that no medical disability prevented Carnes
County’s evidence consisted, in part, of a film taken by a private investigator four days before the hearing. The film (as well as testimony by the investigator) depicted Carnes shoveling horse manure at his stables, and bending and moving with apparent ease.
County also introduced the testimony of Dr. Powlan, an orthopedic surgeon who had examined Carnes in person and studied his X-rays. Dr. Powlan stated that Carnes had “recovered very well” from a “cleanly done” operation. There were no signs of any ongoing or fresh irritation in the injured area. Dr. Powlan further opined that the deputy sheriff’s job would have no more harmful physical effect on Carnes’s back than his new job as a salesman.
A third and final medical opinion was given by Dr. Handon, the Board’s independent medical advisor. He reviewed Carnes’s medical history and concluded that “disability is totally unproven on an objective ground.” Dr. Handon insisted that Carnes had recovered well from his surgery and could physically perform his duties as a deputy sheriff.
After the hearing, the Board concluded that Carnes was “permanently incapacitated for the performance of the usual duties of the deputy sheriff position within the meaning of the retirement law of 1937 (Gov[.] Code, § 31724),” and that his “incapacitation results from injury arising out of [and] occurring in the course of his employment.”
County petitioned the superior court for a writ of mandate (Code Civ. Proc., § 1094.5) to compel the Board to set aside its decision and enter an order denying Carnes’s application for disability retirement. Following a hearing, the court independently reviewed and weighed the evidence in the administrative record, and granted the requested relief.
On appeal, Carnes argued that the trial court should have limited itself to determining whether the Board’s decision was supported by substantial evidence. The Court of Appeal disagreed and affirmed the judgment. It concluded that the trial court had properly exercised its independent judgment under our decision in Interstate Brands, supra,
Code of Civil Procedure section 1094.5, subdivision (c), provides alternative standards for judicial review of the evidentiary basis of an administrative agency’s adjudicatory decision: “Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence. In all other cases, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record.”
The foregoing language does not attempt to specify which cases are reviewable under the “weight of the evidence” and “substantial evidence” standards. The sole legislative guidance on this point is that the courts may independently weigh the evidence whenever “authorized by law” to do so. In using this language, the Legislature simply intended to codify existing rules governing the applicable standard of judicial review. (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979)
In Bixby, supra, 4 Cal.3d at pages 138-140, we approached this task by observing that the independent judgment test had its historical roots in the notion that agencies lacking in judicial power are precluded from performing judicial functions. We recognized that the essence of this function is to make binding determinations on conflicting evidence, particularly where constitutional liberty and property interests are involved. (Ibid.) To uphold such a decision by a “nonjudicial” agency, without allowing the court to reweigh the evidence, would offend separation of powers principles and then-existing constitutional constraints on the allocation of the state’s judicial power.
Accordingly, as we noted in Bixby, supra, 4 Cal.3d at pages 138-140, the independent judgment test was first applied to administrative adjudications which threatened to deprive the aggrieved party of a constitutionally protected property right. In Drummey v. State Bd. of Funeral Directors (1939)
Bixby acknowledged this heritage and concluded that independent judicial review is required whenever a “fundamental vested right” is at stake. (
We have seen a steady expansion in the class of rights which fits this description. (See e.g., Berlinghieri v. Department of Motor Vehicles, supra,
Of particular interest is Interstate Brands, supra, 26 Cal.3d at page 770, which extended the fundamental vested rights doctrine to an employer who
In analyzing this argument, we noted that there was no reciprocity between the right of the employee to independent judicial review, and the right of the employer. Although the employees had a fundamental vested right in their eligibility-to-benefits determination, the employer could not also invoke the independent judgment test unless it could claim its own such right. (Interstate Brands, supra, 26 Cal.3d at pp. 780-781.)
Nonetheless, we found that the employer had a direct pecuniary interest in avoiding erroneous charges against its unemployment insurance reserve account. We emphasized that, under the applicable statutory scheme, the employer “is required by law to make contributions to the unemployment fund [citation]; that the rate of those contributions, expressed as a percentage of average base payroll, is based upon the ratio between its average base payroll and the net balance in its reserve account [citations]; and that . . . ‘[a]ny final decision of the administrative tribunal which awards benefits to a claimant has the effect of depleting an employer’s reserve account [and may thereby adversely affect his rate of contributions]. . . .’” (Interstate Brands, supra, 26 Cal.3d at p. 781; quoting Chrysler Corp. v. California Emp.etc. Com. (1953)
The County Employees Retirement Law of 1937 is structured in an analogous fashion. (Gov. Code, § 31450 et seq.)
Under this scheme, there are two ways in which County “pays into” the system. It does so by complying with the periodically readjusted rate of contribution (§§ 31453.5, 31454), and by funding any deficits in the system (§ 31454.5).
It is manifest that the “mortality, service, and compensation experience” of the system’s participants will reflect an increase in the rate of successful service connected disability claims. (§ 31453.) Such early retirement awards also undoubtedly influence the overall “assets and liabilities” of the fund (ibid.), and may thereby alter the results of the actuarial survey conducted for that reporting period. Since any change in the actuarial outlook may affect future county and district appropriations, a public employer who is required to contribute to the system has a direct pecuniary interest in challenging these kinds of awards.
Accordingly, the only discernible difference between this case and Interstate Brands, supra,
Such a distinction also would be indefensible from a practical standpoint. In particular, dissimilar treatment of employers for purposes of judicial review would lead to arbitrary and disparate treatment of employees. Under Interstate Brands, supra,
The judgment of the Court of Appeal is affirmed.
Lucas, C. J., Panelli, J., Arguelles, J., and Kaufman, J., concurred.
Notes
At the time of our decision in Bixby, supra, 4 Cal.3d at page 130, former provisions of article VI, section 1 of the California Constitution had long been interpreted as precluding the Legislature from vesting judicial powers in agencies of statewide jurisdiction. Their decisions, therefore, were not reviewable by certiorari, which lies only to review judicial action and which contemplates that findings based on substantially conflicting evidence are binding on the reviewing court. (See Standard Oil Co. v. State Board of Equal. (1936)
All further statutory references are to the Government Code unless otherwise indicated.
Dissenting Opinion
I dissent.
The ordinary rule applied in the United States in reviewing determinations of administrative agencies is the substantial evidence rule where the judiciary defers to the factual decisions of the administrators and upholds them unless the findings are unsupported by substantial evidence in the light of the whole record. California follows the national practice in some cases but in others it applies a unique rule where the trial court exercises its independent judgment, reweighing the evidence and making its own factual determinations. (See Anton v. San Antonio Community Hosp. (1977)
Moreover, the practical effect of the filing of a petition for writ of mandate in cases subject to the independent judgment rule is to vacate the factual findings of the administrative agency. It makes no sense to permit one governmental agency, here the County of Alameda, to vacate the factual findings of an administrative agency, the board of retirement, by merely filing a petition when the Legislature has specified that it is the administrative agency that is to determine the factual issues and has not indicated that approval of the county is required.
Robert Carnes was initially employed by the County of Alameda as a deputy sheriff in 1969. As a result of several injuries he underwent back
The association is established under the County Employees Retirement Law of 1937. (Gov. Code, § 31450 et seq.) As a deputy sheriff, Carnes was a member of the association. (Gov. Code, §§ 31469, 31469.3.) Four of the nine members of the retirement board are appointed by the board of supervisors, four are elected by the employees association, safety employees, and retired employees, and the ninth member is the county treasurer.
The county and the employees make contributions to the retirement fund which is administered by the board. Upon the basis of actuarial evaluation, the board recommends to the board of supervisors the amounts to be appropriated by the county and by districts and the rate of member contributions. The board of supervisors from time to time adjusts the rate of member contributions, the amounts to be appropriated, and amounts, if any, necessary to fund deficits. (Gov. Code, §§ 31453-31454.5.)
Government Code section 31725 provides: “Permanent incapacity for the performance of duty shall in all cases be determined by the board.”
Historically, the independent judgment standard of review traces its heritage to Standard Oil Co. v. State Board of Equal. (1936)
In Drummey v. State Bd. of Funeral Directors (1939)
McDonough v. Goodcell (1939)
Thus, prior to the adoption of Code of Civil Procedure section 1094.5 in 1945, the courts had developed as a constitutional doctrine the requirement that a court reviewing an adjudicatory determination for a governmental agency must exercise its independent judgment on the evidence in certain cases. The basis of the requirement was not that administrative agencies could not exercise fact-finding power alone but that the exercise of such power when individual rights of liberty and property were involved would constitute an exercise of the judicial power.
Under the constitutional doctrine a governmental agency, such as a county, may not invoke the independent judgment standard of review when it
Moreover, it is apparent that the practical concerns which gave rise to the independent judgment rule have no application to cases where a governmental agency seeks review of another governmental agency’s decision. The practical concerns are that the bureaucracy established to advance valid governmental policy decisions will in carrying out those legislative determinations run roughshod over the individual’s fundamental vested rights.
The provisions of Code of Civil Procedure section 1094.5 and the cases applying them also do not warrant independent judgment review. The section provides for both substantial evidence and independent judgment review. Although the Legislature on occasion has specified the appropriate standard of review in certain matters (Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979)
In the landmark case, Bixby, the court commenced its discussion of the appropriate standard of review to be applied by pointing out that under the separation-of-powers doctrine the judiciary, because of its independence and long tenure, probably can exert a more enduring and equitable influence in safeguarding fundamental constitutional rights than the other two branches of government which remain subject to the will of a contemporary and fluid majority. Recognizing the great growth of administrative bureaucracy, it was pointed out that the courts initially reacted “with the suspicion and fear that the burgeoning bureaucracy would endanger the prevailing concepts of individual rights,” but that courts recognized that the new administrative tools were necessary to cope with new complexities. (4 Cal.3d at pp. 141-142.)
In balancing the need for administrative expertise and the rights of individuals, the court concluded that the determination of the appropriate standard of review must be made on a case-by-case basis. If “the right has been acquired by the individual and if the right is fundamental, the courts have held the loss of it is sufficiently vital to the individual to compel a full and
Subsequent cases have likewise emphasized that the effect of the administrative decision on the individual is the basic concern in determining whether the independent judgment rule is applicable. For example, in Anton v. San Antonio Community Hosp., supra,
It is apparent that when one governmental agency or subdivision seeks review of the decision of another governmental agency or subdivision, the basic consideration requiring independent judgment review is absent. The basic consideration is the importance to the individual of the affected right, and obviously governmental agencies and subdivisions are not individuals.
Moreover, the Legislature should be permitted to designate which of several governmental agencies should make the ultimate determination on a question common to them, and when the decision is made, it should be binding on all if supported by substantial evidence. If a de novo review is permitted, it is apparent that the decision of the designated agency is entitled to no greater weight than the others. Thus, if the independent judgment rule were to be applied to the retirement board’s decision in the instant case upon the county’s petition for writ of mandate, it would mean that the superior court would decide the issues, including the factual issues, notwithstanding that the Legislature did not direct the county counsel to decide whether the pension should be granted and the employee retired but expressly stated that the board should decide. (Gov. Code, § 31725.)
Only four appellate cases have been found where a governmental official, agency, or subdivision sought review of a decision of another governmental agency which was not given judicial powers by the Constitution. Three of the four cases applied the substantial evidence rule, and while the fourth held that the independent judgment rule was applicable, it is distinguishable. In Northern Inyo Hosp. v. Fair Emp. Practice Com. (1974)
In two cases, sheriffs sought review of decisions of county civil service commissions reducing the discipline imposed for misconduct. In both cases, it was held that the substantial evidence rule was applicable. (Carpenter v. Civil Service Com. (1985)
The independent judgment rule was held applicable in the fourth case, where a municipal water district sought review of a decision of the Division of Water Resources of the Department of Public Works. (Temescal Water Co. v. Dept. Public Works (1955)
None of the cases cited above suggests reasons why the interests of governmental agencies require independent judgment review. The fact that employees have a fundamental vested right in their retirement benefits and thus are entitled to independent judgment review of adverse administrative decisions does not furnish a basis to conclude that the county is entitled to such review. Reciprocity does not apply; the litigant seeking independent judgment review must do so on the basis of its own rights. (Interstate Brands v. Unemployment Ins. Appeals Bd. (1980)
The majority assert that the county has a pecuniary interest in the retirement funds analogous to that of a private employer’s interest in avoiding improper charges to its unemployment insurance reserve account and that since under Interstate Brands v. Unemployment Ins. Appeals Bd., supra,
The majority’s analysis fails for several reasons. The county’s interest is substantially different because it has multiple interests involved here. If the
More importantly, the reasoning of Interstate Brands, supra,
The instant case meets neither of the tests enunciated in Interstate Brands. Unlike the employer’s right to independent judgment review estab
It is true as the majority point out (maj. opn. at p. 909) that a decision to pay Deputy Carnes’s disability pension will have economic consequences to the retirement fund and may require county contribution to offset it. But governmental agencies without a hearing are regularly paying claims based on their factual determinations that the money is due, and those payments require the agency to either seek other funds or forgo other expenditures.
Under the constitutional doctrine, the statute, and the extensive case law, there is no valid reason to apply independent judgment review to the board’s determination that Deputy Carnes is disabled from performing the job as a deputy sheriff. Absence of any justification to apply independent judgment review precludes its application.
There is substantial evidence to support the board’s determination, evidence that a return to performance of the usual duties of that position will quickly result in grave injury in view of the disc surgery and his remaining injuries. Although there is conflicting evidence, the trial court should have applied substantial evidence review and upheld the board’s determination.
The judgment of the Court of Appeal should be reversed.
The relationship between ‘vestedness’ in the traditional sense and ‘fundamentalness’ in the Bixby sense is illuminated by a little-noted passage of the opinion which states: ‘[I]n determining whether the right is sufficiently basic and fundamental to justify independent judgment review, the courts have considered the degree to which that right is “vested,” that is, already possessed by the individual.’ (
Dissenting Opinion
I agree with Justice Broussard’s dissent. I write separately only to express my disenchantment with extensive litigation between two agencies of the same governmental entity.
Here we have the County of Alameda, acting through its board of supervisors and county counsel, suing the County of Alameda Board of Retirement. Not only is such an internecine lawsuit unseemly, it has occupied the time and resources of a trial court, an intermediate appellate court, and now this court, not to mention the legal talent involved.
In short, the courts have important issues to decide. They should not be required to resolve a local turf controversy.