The State Worker

The State Worker continues to hear from state employees who are complaining that a recent furlough lawsuit settlement between SEIU Local 1000 and the Brown administration isunfair.

The complaints run along two tracks. One comes from managers and supervisors in the five "off-budget" agencies named in the settlement. They're not represented by SEIU or any other unions and aren't part of the furlough agreement.

Callers have pointed out that when a union reaches a contract agreement at the bargaining table that the managers and supervisors attached to those covered workers usually receive similar terms.

The exempt employees calling and emailing us about the furlough settlement think the same should apply here to the furlough back pay agreement. Of course, that decision is up to the Brown administration and/or the agencies.

The other complaint comes from state worker blog users who think that settlement provisions that awarded back pay to rank-and-file workers in five "off budget" agencies unfairly and arbitrarily single out a select few employees for a special benefit.

It's a twist on the complaints we heard when employees working for constitutional officers avoided furlough. Ditto when the courts decided State Compensation Fund Employees were illegally furloughed awarded them back pay.

SEIU has said that it got the most it could from a losing legal hand.

What do you think?

We've heard from several state workers who aren't happy that SEIU Local 1000 settled its furlough litigation in exchange for back wages for 700 or so of its members working in "off-budget" agencies.

Local 1000 President Yvonne Walker has said that the union's legal team advised that broader litigation wasn't likely to win, so the union cut its losses and took what it could get from a settlement.

Paul Warrick, an associate governmental program analyst, sent an email to The State Worker that hits the tone of the complaints we've heard. We're publishing his email here, unedited and with his permission. He's speaking for himself, not his employer, colleagues or Local 1000:

Big whoop! Someone (or SEIU) should have pursued the larger Federal issue of equal pay for equal work. Everyone who receives a state payroll check should have been furloughed or no one should have been furloughed. Furloughs were happenstance. If you just happened to be an Office Technician, Staff Services Analyst, etc. in the wrong agency (based on funding source or other criteria), you got furloughed while your neighbor who was also an OT or SSA, but worked for another agency didn't get furloughed. It's just ridiculous.

Paul Warrick DSS

A former Department of Transportation employee who attempted to illegally export military satellite technology has been indicted on federal charges, according to court documents unsealed today.

Civil engineer Philip Chaohui He, who was also known as Philip Hope, was arrested in Long Beach on Dec. 11 and fired from his Caltrans job 10 days later for failing to show up to work.

Department spokeswoman Tamie McGowen said that He, an Oakland resident, reviewed technical drawings and that his work was closely supervised, including work he did on the Bay Bridge.

"He had no access to sensitive information that's not available to the public," McGowen said, asserting that there are no safety or security concerns about He's work.

Investigators from U.S. Immigration and Customs Enforcement and the Department of Homeland Security told Caltrans last July that they were watching He. At the fed's request, Caltrans cooperated with the investigation.

"We're proud of the fact that we were closely working with them," McGowen said.

The Colorado federal grand jury indictment alleges that He drove to the port of Long Beach on Dec. 11 with 200 radiation-hardened integrated circuits worth nearly $550,000 in the trunk of his car. The circuits, which are considered sensitive defense articles banned from export without federal authorization, were concealed in plastic infant formula containers inside five sealed boxes marked "milk powder" in Chinese.

At the port, the indictment alleges, He met two men "in front of a docked ship bearing a (Chinese) flag. The (Chinese) flagged ship was registered to Zhenhua Port Machinery Company LTD, a subsidiary of the ... state-owned corporation China Communications Construction." One of the men had a Chinese passport and the ship was scheduled to return to China in a few days.

He allegedly obtained the circuits illegally from Colorado-based Aeroflex Colorado Springs. After his arrest, he was extradited to Colorado and now faces up to 35 years and $1.5 million in fines on charges of conspiracy, attempted unlawful export and attempted smuggling of defense articles.

He appeared in U.S. District Court in Denver on Friday where he was advised of his rights and the charges against him
.
Click here to read the Colorado federal grand jury indictment.

As part of its agreement with Gov. Jerry Brown's administration, SEIU Local 1000 has filed requests for dismissal of five furlough lawsuits in Alameda, Sacramento and San Francisco superior courts.

Click here for background on the furlough litigation between the union and Brown.

The following links open Local 1000's applications to have the cases dismissed. If you want more information about each, click on the county in the list below to open the court's document viewer, plug in the case number, and download the complaints.

Alameda Case No. RG10494800
Alameda Case No. RG10507922
Alameda Case No. RG094567750
Sacramento Case No. 34-2009-80000150-CU-WM-GDS
San Francisco CPF09509782

IMAGE: www.yolocourts.ca.gov

The union representing the state's legal professionals and Gov. Jerry Brown's administration have agreed to settle their furlough fight.

The deal returns wages lost to furlough to about 24 members of California Attorneys, Administrative Law Judges and Hearing Officers in State Employment. In exchange, the union is dropping its last two furlough lawsuits.

The agreement affects only CASE members in five departments that don't receive legislative budget appropriation: First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the California State Lottery.

SEIU Local 1000 recently agreed to a similar settlement.

The CASE rationale, which you can read below or by clicking here, can be summed up in five words: "Take what you can get."
CASE memo to members

Our report in today's Bee quotes SEIU Local 1000 President Yvonne Walker talking about the union's decision to settle its furlough litigation against the state. Here are highlights from her interview with The State Worker:

On working with Democratic Gov. Jerry Brown compared with his predecessor, Republican Arnold Schwarzenegger:

"What a difference a governor makes. ... He actually respects workers and the services we provide Californians."

On the state's furlough policy and Brown's position on it:

"We've said all along the furlough plan was a bad plan. It not only jeopardized working people, but came at a great cost to the state. This governor did the right thing. He looked at it and understood that we had the opportunity to say, 'How do we close out this ugly chapter in the state's history?' "

On how the deal came together:

"The governor's attorneys called and said, 'Can we settle this?' and we said, 'Yes.' "

On arguments that the agreement benefits a relatively small group of SEIU members at the expense of pursuing lawsuits that could benefit the vast majority of union-covered state workers:

"Realistically, those four lawsuits didn't have the potential to do something for everyone. We lost the majority of our cases. Even when your cause is righteous, going to court is a crap shoot."

PHOTO CREDIT: Yvonne Walker speaks at a news conference responding to Gov. Schwarznegger's furlough plan for state workers, Friday Dec. 19, 2008. Sacramento Bee / Brian Baer

Correction, 2:57 p.m.: An earlier version of this post incorrectly stated that the Office of Administrative Hearings is one of the five departments included in the SEIU settlement.

Roughly 700 state workers covered by SEIU Local 1000 will receive back wages from an furlough lawsuit agreement between the union and Gov. Jerry Brown's administration.

The deal, which we first reported this afternoon, also dumps four much larger furlough lawsuits the union was pressing in Northern California trial courts.

Only Local 1000 employees at First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the California State Lottery will receive back pay without interest for days that they were forced to take off without pay in 2009 and 2010. State workers represented by other bargaining units and managers in those organizations aren't part of the settlement, said Lynelle Jolley, spokeswoman for the state Department of Personnel Administration.

The agreement is a good deal for the state on two fronts:

• It costs taxpayers nothing, since all five departments are completely self-funded -- which was the basis of the argument that their employees shouldn't have been put on furlough in the first place.

• SEIU also agreed to drop four other furlough lawsuits pending in Alameda, Sacramento and San Francisco courts, Jolley said. Those lawsuits had the potential to cost the state tens of millions of dollars in back wages and interest for roughly 80,000 of the 95,000 workers the local represents. The litigation argued that for a variety of reasons furlough policy itself was illegal, not merely its application to a select departments.

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Employees in five departments will receive back pay for wages lost to furloughs according to a settlement reached between labor and Gov. Jerry Brown's administration.

The deal includes workers at First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the California State Lottery, according to sources familiar with the agreement who spoke on condition of anonymity because the affected employees hadn't been told as of this morning.

The number of employees affected and the amount of money they'll receive aren't yet known, although one source said that the back pay will not include interest. The departments are all relatively small.

We expect more details later today as the unions and the departments divulge them to their employees.

The settlement lays to rest union litigation that argued that it was illegal to furlough employees in departments that received a significant portion of their budgets from outside the state's beleaguered general fund.

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From reporter Charles Piller's story in today's Bee:

Duane Wiles, recently fired by the California Department of Transportation for fabricating bridge tests, has been allowed to resign instead.

This marks the second time Wiles has been "unfired" by Caltrans. The first was in 1998 for incompetence, insubordination, dishonesty and other problems, but the agency was overruled by the State Personnel Board.

This week's settlement agreement with Caltrans prevents a public airing of Wiles' admitted fraud and errors, and removes a public forum for examining whether agency higher-ups responsibly addressed the problem.

Here's the stipulated settlement agreement signed by Wiles, his attorney and Caltrans representatives.
Duane Wiles Settlement Agreement with Caltrans

The California Correctional Peace Officers Association last month made a second court-ordered $500,000 security deposit while it appeals its loss in the Dawe v. Corrections USA case.

A the embedded document below shows, CCPOA made the payment on Dec. 20.

Federal Judge Lawrence Karlton ordered the payments last September as part of a cash-and-property collateral securing the $5 million awarded to businessman Brian Dawe after a jury found that CCPOA defamed him. Two other men also received smaller awards in the case.

While the union presses its appeal, it must make quarterly half-million-dollar payments into a court-controlled account until the amassed money equals 125 percent of the judgement.

A federal jury originally awarded a total of $12 million to Dawe, but Karlton lowered that to $5 million. While the union is trying to get the decision overturned, Dawe is appealing to get the original award restored. Here's an earlier post with more background and court documents.

Thanks to Blog User T for asking whether the second payment had been made.

CCPOA's Notice of Second Deposit

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The California Correctional Peace Officers Association has settled a discrimination and unfair treatment lawsuit brought by a former longtime employee whose husband had been a 2008 candidate for the union's presidency.

The terms of the settlement are confidential.

CCPOA spokesman JeVaughn Baker said that the union "rejects all of the allegations," but made a "pragmatic business decision" to settle.

"At some point you have to count the beans," Baker said this morning. "This is a low-level employment issue, an internal issue."

A call to former employee Sharon Rafferty's attorney, James E. McGlamery, wasn't immediately returned.

An Alameda Superior Court judge has pushed back a hearing to debate whether employees in five or six "special fund" departments were illegally furloughed.

Judge Frank Roesch originally scheduled Yvonne Walker and SEIU Local 1000 v. Schwarzenegger for hearing at the end of this month, with the first deadline for filing documents with the court set for Friday.

Click here for background on the case, which concerns employees at First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the Office of Administrative Hearings. Local 1000 is hoping to add the California State Lottery Commission to the list.

Local 1000 and the Department of Personnel Administration requested more time. Judge Patrick Zika granted it on Monday. The hearing is now scheduled for Feb. 16 The administration's brief in defense of the furlough policy is due Jan. 23. The union has until Feb. 2 to file its response.
Alameda furlough litigation continuance

A remnant of the "special funds" furlough litigation pressed by SEIU Local 1000 is set for a court hearing later this month.

The matter, Service Employees International Union Local 1000 and Yvonne Walker v. Arnold Schwarzenegger, revisits the union's argument that furloughs were illegally applied to departments that receive money outside of the general fund.

Local 1000 initially won that argument for 63 departments, but San Francisco's 1st District Court of Appeal in July overturned that ruling. It made exceptions for five departments that it said deserved further argument in the lower court: First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the Office of Administrative Hearing. Click here for more background.

The local asked the California Supreme Court to consider the case. It refused.

The case covering those five departments -- and a sixth that the union wants to bring into the case, the California State Lottery Commission -- gets its first court hearing on Dec. 29 at 3:45 p.m. in Alameda Superior Court in Oakland. The state has until Friday to file its arguments with the court. The union has until Dec. 23 to file a response.

We expect the Department of Administration, which handles furlough litigation for the state, to ask for a continuance, given the relatively short time between Alameda Superior Judge Frank Roesch's Nov. 22 order and the Friday deadline for the state's filing.
Walker and SEIU Local 1000 v. Schwarzennegger

The Association of Special Agents is suing Gov. Jerry Brown and Department of Finance Director Ana Matosantos over targeted Department of Justice layoffs that the agents contend are politically motivated. The agents group is an affiliate of the California Statewide Law Enforcement Association.

Click here for Kevin Yamamura's report on Capitol Alert. Read our recent story about the political history that prompted the association's complaint by clicking here.

And here's the complaint filed in Sacramento Superior Court today:
Association of Special Agents v. Jerry Brown

An attorney with SEIU Local 1000 says the union will continue to press litigation against "special fund" furloughs, even though the courts have slimmed down the case to covering employees in just a handful of state departments.

Local 1000 had identified 63 "special fund" departments that it said shouldn't have been included in the Legislature's furlough authorization. The union won that argument in Alameda Superior Court, but San Francisco's 1st District Court of Appeal in July overturned that ruling. It made exceptions for five departments that it said deserved further argument in the lower court. (For more background, click here.)

SEIU appealed to theCalifornia Supreme Court, which refused take up the matter.

The union said it would keep fighting for its members in those five departments -- First 5 California, the Prison Industry Authority, the California Earthquake Authority, the California Housing Finance Agency and the Office of Administrative Hearings -- even though the remanded case now covers relatively few of its 95,000 employees.

The State Worker caught up with SEIU Local 1000 attorney Felix De La Torre to ask about the status of the case. Is the union still planning to continue the fight? If so, what's the hold up? Here's part of an email De La Torre fowarded to us last week, which is his response to an SEIU member who asked the same question:

Another union furlough argument fell Monday when San Francisco's 1st District Court of Appeal told a trial court to change a favorable ruling to an unfavorable one against the California Correctional Peace Officers Association, which had claimed the policy as carried out for its members was an illegal pay cut.

The appellate court's decision in Brown v. Superior Court of Alameda County was a blow to the union whose 32,000 or so members stood to collectively gain millions of dollars -- no one is sure exactly how much -- in back pay and interest had the decision gone the other way. CCPOA says that it is deciding its next move in a case that stretches back more than two years.

CCPOA did win that argument in Alameda County Superior Court, claiming that "self-directed" furloughs -- which cut a prison officer's pay but deferred his or her corresponding time off -- violated state laws, including its minimum wage statute.

The appellate court action bogged down while attorneys for the union and then-Gov. Arnold Schwarzenegger argued over whether the trial court decision could be appealed and while other litigation that examined furlough authority and furlough process took the legal limelight.

Last month, the California Correctional Peace Officers Association made its first court-ordered $500,000 deposit while it appeals a multimillion-dollar defamation case that it lost last year.

The payment is part of the cash-and-property collateral ordered last month by federal Judge Lawrence Karlton while the union appeals Dawe v. CUSA. While the union presses its case, it must make quarterly half-million-dollar payments into a court-controlled account. The money and four union-owned properties, including CCPOA's West Sacramento headquarters, are collateral securing the $5 million it currently owes businessman Brian Dawe and two other men after a federal jury decided the union had defamed them.

Blog backs review your thoughtful and provocative online comments, amplify points, answer questions, correct our mistakes and humbly accept your warranted criticism.

Sharp-eyed blog user WilliesCons had a question about our post that the California Supreme Court had refused to take a "special funds" furlough case that SEIU Local 1000 had won at the trial court level and then lost when the government appealed. Weren't there some departments that the 1st District Court of Appeal said might still be in play for a successful "special funds" argument?

The Fair Political Practices Commission signed off on fines for more than a dozen current and former CalPERS board members and employees today, closing the books on an investigation that started with 58 people connected to the mammoth pension fund.

The action today rubber stamped penalties already agreed to by 16 individuals who violated state law by failing to report meals, alcohol, clothing, sports and entertainment tickets and other gifts received from CalPERS investment partners since 2006.

The fines ranged from $3,600 against portfolio manager Shaun Greenwood to $200 for Sue Kane an adviser to CalPERS' board President Rob Feckner.

The California Supreme Court has refused a union request to consider whether furloughing employees in so-called "special fund" departments was illegal.

The court refused the petition for review by SEIU Local 1000 on Wednesday. The union had hoped to have another crack at litigation that it won in Alameda Superior Court nearly two years ago and then lost last July in San Francisco's 1st District Court of Appeal.

The high court's refusal to look at SEIU's case underscores that the special funds argument against furloughs is essentially dead, as legal observers have been telling The State Worker for quite some time.

Click here for the court docket that lays out the events leading up to the Supreme Court's refusal to review the case.

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With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's fiber/cyber Sacramento Bee takes a longer look at the results of the recent gift-reporting investigation of CalPERS staff and administrators, both former and current. We noted that Fair Political Practices Commission investigators determined that half of the 58 individuals investigated did nothing wrong and seven received warning letters and nothing more.

Here are the names of 25 of the 29 individuals who received no punishment or warning letter from the FPPC, according to a list provided by CalPERS and researched by The Bee. The FFPC says that 29 cases were dropped because the individuals were blameless, so we're short four names. We'll amend this post when we get them.

Current staff and board members
Amit Aggarwal
Judy Alexander
Eric Baggesen
Derek Bergquist
Eric Busay
Dave Carmany
Diego Carrillo
Craig Dandurand
Joseph Dear
Jane Delfendahl
George Diehr (board)
Al Grijalva
Derek Hayamizu
Ken Huettl
J.J. Jelincic (board)
Lynn Keay
Henry Lam
Farouk Majeed
Randy Pottle
Michael Riffle
Brian Russell
Eric Schlendker
Dan Tanner

Former staff
Fred Buenrostro
Mary Cotrill

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee looks at the final chapter of the Fair Political Practices Commission's investigation into gift reporting lapses at CalPERS.

Bottom line: The investigation turned up paperwork gaps and 16 people have agreed to pay fines totaling about $20,000 for failing to disclose some freebies they received from companies doing business with CalPERS.

In an unusual move, FPPC Chief of Enforcement Gary Winuk, wrote a memo to commissioners about the investigation in advance of the Sept. 22 hearing set to consider the 16 stipulated settlements reached. He concluded that there were several factors working in CalPERS favor, including the employees' and board members' cooperation, confusion between an in-house reporting mandate and what the law requires and CalPERS' "strict no-gifts rule for staff and ethics training programs that go beyond the requirements of state law."
CalPERS investigation memo by FFPC Enforcement Chief Gary Winuk

4:05 p.m.: This post has been updated with a statement from CalPERS.

The State Personnel Board has upheld a formal reprimand against Joseph John Jelincic Jr. over claims that he sexually harassed co-workers at the California Public Employees' Retirement System. The incidents occurred before and after he took an at-large seat on the fund's 13-member board in January 2010.

Jelincic worked in CalPERS' investments office until early July, when the fund released him to do board work full time. Three women complained that Jelincic's long looks and language had made them uncomfortable. The Bee is not naming the women because of the nature of the case.

In a telephone interview this afternoon, Jelincic said that he hadn't seen the decision and couldn't yet comment on it.

CalPERS spokesman Brad Pacheco issued a statement via e-mail: "CalPERS has a zero tolerance policy for harassment of any kind. We are committed to ensuring that our employees have a work environment that is professional, safe, and free from harassment."

A Sacramento federal judge has ruled that the California Correctional Peace Officers Association can put up four properties it owns, including its West Sacramento headquarters, as collateral for several million dollars it owes from a defamation lawsuit loss while it appeals the decision.

But Judge Lawrence Karlton said in his order Thursday that the union also must pay $500,000 every three months into a court-controlled account while the appeal plays out.

The decision is the latest twist in Dawe v. Corrections USA, in which a federal jury decided the union had defamed businessman Brian Dawe and two other individuals. The jury awarded a total $12 million to the plaintiffs, but Karlton reduced that to $5 million. Dawe is appealing the reduction. (Click here for more about the case.)

Less than a week after lawyers debated whether employees of constitutional officers should have been furloughed like state workers elsewhere, Sacramento's 3rd District Court of Appeal said that there's no special status for the constitutionals' staff.

The unanimous ruling by Justices Vance Raye, George Nicholson, Ronald Robie, released this afternoon, doesn't affect the pay of the roughly 16,000 employees who work in departments and agencies headed by officials elected via statewide vote, including the lieutenant governor, the secretary of state, the treasurer, the controller, the attorney general, the superintendent of public instruction, the insurance commissioner and the Board of Equalization.

None went along with then-Gov. Arnold Schwarzenegger's veto order in February 2009, arguing that independently elected executives didn't have authority to control their staffing. The administration sued in Sacramento Superior Court and won. The constitutionals appealed the decision and kept their employees on full hours and pay.

The California Correctional Peace Officers Association may have to start making $500,000 payments every three months and put up its West Sacramento headquarters and other property as it appeals its loss in a federal defamation case.

After hearing arguments this morning, Judge Lawrence Karlton is still deciding what to do about CCPOA's inability to buy a bond to cover a judgment rendered last October in his Sacramento courtroom -- eventually reduced from a total $12 million to $5 million by the court -- while the union appeals to San Francisco's 9th Circuit Court.

Plaintiff Brian Dawe is appealing to the same court to restore the full award.

CCPOA said last month that it didn't have enough liquid assets to buy a bond to cover an amount equal to 125 percent of the $5 million award Dawe is due pending appeal and asked to use its properties as collateral instead. Dawe attorney Daniel Baxter objected for several reasons, including the expense of taking over the properties.

Three justices from Sacramento's 3rd District Court of Appeal took turns on Wednesday, grilling an attorney who argued that they should overturn a lower court's ruling that constitutional officers' employees should have been furloughed along with other state workers.

Meanwhile, the panel lobbed legal softballs to a Brown administration lawyer who contended that the constitutional furlough issue had substantially changed since Gov. Arnold Schwarzenegger first sued the constitutionals in February 2009 to force them to comply with his furlough order.

With the next round of debate looming in the a multimillion-dollar defamation lawsuit it lost, the California Correctional Peace Officers Association's latest federal court filings offer up more information about the union's finances.

The documents filed Monday in federal court in Sacramento indicate that the union is scaling back spending as it braces for the possibility it might lose its appeal of the nearly $5 million judgment leveled against it in Dawe v. Corrections USA, CCPOA, et al.

The arguments are in. Now a panel of appellate justices must decide whether the state illegally furloughed some 32,000 correctional officers by cutting their pay by up to 15 percent per month but deferring the commensurate time off.

In documents filed in San Francisco's 1st District Court of Appeal and during courtroom debate on Thursday, lawyers for the California Correctional Peace Officers Association said the so-called "self-directed" furloughs were an illegal pay cut.

Attorneys for the Department of Personnel Administration, which handles furlough litigation for the state, argued that a 2010 furlough ruling by the California Supreme Court invalidated CCPOA's claim.

Click here for more about the legal history of the case. The appellate court has 60 days to issue a decision.

San Francisco's 1st District Court of Appeal has set Sept. 1 at 9 a.m. to hear oral arguments in California Attorneys, Administrative Law Judges and Hearing Officers in State Employment v. Schwarzenegger.

The case is the last chance for the appellate court to confirm one of three rulings by an Alameda Superior Court judge that state workers in so-called "special fund" departments were illegally furloughed.

Click here to see the court's case calendar.

The Fair Political Practices Commission has spared at least six current and former CalPERS officials from paying fines for failing to report gifts on official disclosure forms.

The FPPC opened an investigation earlier this year over allegations that 49 CalPERS board members and employees failed to accurately report gifts from lobbyists, contractors and other entities during the past five years. Six letters released last month are among the first results from the investigation. More findings are likely to be released over the next several weeks.

FPPC staff closes investigations by concluding there was no violation, advising an individual that he or she nearly committed a violation, issuing a warning that recognizes a violation was not worthy of a fine or asking the commission to approve a fine of up to $5,000 for each violation.

A court hearing scheduled for this morning in the multimillion dollar defamation lawsuit against the California Correctional Peace Officers Association has been delayed until Aug. 29.

The attorney for businessman Brian Dawe, who successfully argued that CCPOA ruined his livelihood, asked the judge for more time to file a brief opposing the CCPOA's request to put up a handful of properties the union owns as security in the case.

Under the new mutually agreed to timeline, attorney Daniel Baxter has until Wednesday to file the opposition brief. CCPOA will have until Aug. 22 to reply.

The union said last month that it didn't have enough cash to acquire a bond to cover an amount 125 percent above the $5 million award Dawe is due, pending appeal.

A jury original awarded Dawe $12.5 million, but Judge Lawrence Karlton, who heard Dawe v. Corrections USA, CCPOA, et al., lowered the award to about $5 million. While CCPOA and Corrections USA appeal the overall decision, Dawe is appealing the judge's lowering of the award.

The properties CCPOA has asked the court to accept as security include its headquarters, two homes in Natomas and land in Rancho Cucamonga.

The five-year-old case stems from when CCPOA ousted Dawe from the board of directors of Corrections USA. Dawe claimed the firing was unjust, and that CCPOA officials discredited him without merit. As a result, he said he was unable to earn a living and damaged his company, Flat Iron Mountain Associates.

110731 Dawe Notice

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Editor's note: This post was corrected on July 20 to report the correct September hearing date.

A bankruptcy court told Don Novey, the former head of the California Correctional Peace Officers Association, to submit a new bankruptcy plan after questions arose about his original filing -- and he has.

Federal Judge Thomas Holman's tentative ruling Wednesday accepted some of the concerns about Novey's plan raised by the bankruptcy trustee and an attorney for CCPOA, which Novey owes $20,000 from an arbitrated contract disagreement.

Today Novey attorney Peter Macaluso filed an amended bankruptcy plan. Creditors and the trustee can now review it. Another hearing to confirm or further modify the plan is set for Sept. 6. Here's background on the case.

Don Novey, the former president of the California Correctional Peace Officers Association, will have to submit a new bankruptcy plan after a creditor and a trustee both objected to his first one.

Bankruptcy court Judge Thomas Holman's decision prolongs a proceeding that has highlighted Novey's bitter falling out with his former union, which fired him in 2009 over allegations he breached his consulting contract with the organization. Novey still owes CCPOA $20,000 from an arbitrated settlement, but he is seeking to shed that obligation and others through bankruptcy.

Union attorney Barry Spitzer has vigorously challenged Novey's bankruptcy plan, implying that he and his wife, Carol, have hidden some of their assets and understated the value of others to shield them from the proceedings.

A hearing in the last undecided "special fund" furlough case in San Francisco's 1st District Court of Appeal has been delayed until September.

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment v. Schwarzenegger was set for hearing on Aug. 3. There's no specific date set for the September debate. The court will do that later, according to a notice published just a few minutes ago.

The case appeals the third of three key furlough decisions issued in 2009 by Alameda Judge Frank Roesch that found furloughing workers in so-called "special fund" departments was illegal. His decisions against the state in the first two cases have been either partially or entirely overturned.

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The California Correctional Peace Officers Association has appealed a multimillion federal defamation lawsuit ruling to the U.S. Court of Appeals for the 9th Circuit in San Francisco, a move that has led the union to offer its West Sacramento headquarters and three other properties it owns as collateral for a multimillion judgment against it.

Lawsuit appellants normally have to post a "supersedeas bond" to cover 125 percent of the awarded amount. CCPOA's court filing says it can't because "it has insufficient liquid assets to satisfy bank requirements."

Judge Lawrence Karlton, who heard Dawe v. CUSA and lowered the $12 million awarded by a jury last fall to about $5 million, has the discretion to reset the bond amount or waive it entirely.

CCPOA says that its headquarters, the two Natomas homes it owns and the land it owns in Rancho Cucamonga are worth a total of $6.2 million. The union is offering them as security while the appeal goes forward. A hearing is scheduled for Aug. 1.

CCPOA is appealing a decision that its representatives defamed businessman Brian Dawe and his associates and damaged his livelihood. Attorney Dan Baxter, who represents Dawe, has cross-appealed Karlton's decision to reduce the award.

Click here for earlier posts about the case that include court documents and a transcript. Here's the union's request to use the property as security during the appeals process. (Hat tip to Blog User J for flagging this for The State Worker.)
CCPOA's Alternate Security Motion

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee notes that the California Correctional Peace Officers Association is both a debtor and a creditor.

Debtor: The state is restarting litigation to force the union to pay millions of dollars owed on its union paid leave tab with the departments of Mental Health and Corrections and Rehabilitation. The sides disagree on how much is owed.

Creditor: A lawyer representing the state's prison officers' union has filed several objections to a bankruptcy plan submitted by the former president of the state's prison officers' union that dumps tens of thousands of dollars in debt he owes.

Don Novey's plan would shed all unsecured debts, including the $20,000 he owes to the California Correctional Peace Officers Association from an arbitrated resolution to a contract dispute. Novey and his wife, Carol, owe much more than that in credit card and other unsecured debt, but CCPOA was the lone creditor to question the Noveys during a contentious bankruptcy hearing last week. This post has more details about the bankruptcy filing itself.

CCPOA attorney Barry Spitzer, whose questions during the hearing indicated he thought the couple undervalued or hid their assets, put his suspicions in writing and filed them with the court on Thursday.

"(CCPOA) hereby objects to the confirmation of the Debtors Chapter 13 plan as not being proposed in good faith," Spitzer wrote in a three-page document. Among his allegations:

>> The Noveys' gross income totaled more than $1.5 million from 2008 to 2010, during which time they didn't pay some taxes and ran up credit cards, "yet claim no significant assets." So where's the money?
>> The Noveys have overstated their IRS tax debt by about $30,000.
>> The Scottsdale, Ariz., condo they've claimed is a rental (and therefore protected property in bankruptcy) is actually a second home.

A hearing date is set for July 19 at 9:32 a.m.
Objection to confirmation of Novey bankruptcy plan

The U.S. Supreme Court agreed Monday to review an appeals court's ruling that a union isn't obligated to send a second notice when adopting a temporary, midterm fee increase in addition to an annual fee notice to members.

The high court's Monday decision to consider the case revives a dispute that started in 2005, when union officials issued a "special assessment" to raise money from all state employees, regardless of their membership status, for a union political fund.

In 2007, a district court ruled that the union should have given notice and allowed employees to opt out. It ordered refunds of the money with interest. San Francisco's 9th Circuit Court reversed that decision as "practically unworkable."

The National Right to Work Legal Defense Foundation, based in Springfield, Va., has represented Dianne Knox and other plaintiffs in the class-action case. Its website describes the nonprofit as a "charitable organization providing free legal aid to employees whose human or civil rights have been violated by abuses of compulsory unionism."

Click here for our earlier reporting on the case. This link opens the Supreme Court's "Granted & Noted List," which details the cases it has decided to consider. Knox is listed on page 3.

IMAGE: www.yolocourts.ca.gov

Several blog users have asked what's next for Don Novey, the former head of the state correctional officers' union who has filed for bankruptcy.

According to this schedule of deadlines and meeting dates, creditors and the bankruptcy trustee have until Thursday to file objections to Novey's filing. A hearing, should it be needed, is already set for July 19 on the sixth floor of the federal courthouse in Sacramento.

From the contentious tone of the creditors' hearing last week, we expect California Correctional Peace Officers Association attorney Barry Spitzer will file an objection on behalf of his client.

We wouldn't be surprised if he resurrects questions he raised in the hearing about the Noveys' cash and bank accounts (they told the court that they have about $2,700 in total) and whether their Scottsdale, Ariz., condo is truly a rental property. The Noveys said last week that it is, even though they bought it in 2006 but have never rented it out. (A rental property that generates revenue might not be seized in bankruptcy, whereas a second residence, such as a winter home, could be.)

Novey, CCPOA's former president, adjusted his bankruptcy filing in Sacramento's federal court last week. The amended documentation, which you can view here, adds minor property holdings, increases the estimated value of a pair of boxing gloves signed by Mohammed Ali from $250 to $1,200 and offers proof for the $5,000 estimated value of family jewelry, among other changes.

The amended filing also adds two timeshare properties, one in Cancun and another in Hawaii, worth a total $2,200.

Novey and his wife, Carol, filed Chapter 13 to avoid paying about $181,000 in credit card and other unsecured debts, including $20,000 from a stipulated settlement with CCPOA. The plan they filed with the bankruptcy court pays $82,000 owed in state and federal taxes and reschedules debts on their Rocklin home and the Arizona condo.

Blog backs review your thoughtful and provocative online comments, amplify points, answer questions, correct our mistakes and humbly accept your warranted criticism.

Last week's news that former CCPOA President Don Novey has filed for bankruptcy protection stirred plenty of comment about the man, his legacy, his split from the union he led for 20 years and the motivation behind The State Worker's coverage.

During a tense bankruptcy hearing this morning, the former president of the state's correctional officers association sparred with an attorney for his former union over everything from his earnings and property holdings to the value of sports memorabilia and jewelry.

Don Novey and his wife Carol Novey sat at one leg of a u-shaped conference table on the 7th floor of the federal courthouse in downtown Sacramento to go over their court filing with trustee Jan Johnson and to give creditors a chance to probe their finances.

Don Novey, the former head of the California Correctional Peace Officers Association, has filed for bankruptcy in Sacramento's federal court.

A May 17 court filing (see the link below) provides a window into the life of the former military intelligence officer and amateur boxer who has been credited with building one of the most powerful labor organizations in California. It also hints at what happened after CCPOA and Novey split amid accusations he had breeched his consulting contract with the union.

Reached today by phone, Novey declined comment. "I can't talk to you," he said.

Novey and his wife, Carol, filed for Chapter 13 protection, stating that their liabilities total $630,000 against assets of about $354,000. From December through May, which is the period of time the bankruptcy court is considering their income, Don Novey has earned an average $28,205 per month,which works out to an annualized earnings of about $338,470. Much of that income is exempt from creditors' claims.

That's down significantly from his 2008 income of $673,443 and the $576,225 he made in 2009.

Among the Novey's debts: $55,000 in federal taxes, another $27,000 in taxes owed to the state and unsecured debt of $181,000. Most of that is revolving lines of credit, but it also includes $20,000 owed to CCPOA from an "arbitration award," the bankruptcy filing shows.

Apparently that's money that Novey is paying after the union terminated his three-year, $150,000-per-year consulting contract late 2009 and then sued him. CCPOA alleged that Novey had spent time and used resources for other clients that should have been dedicated to CCPOA matters.

At the time, Novey linked the termination to his public criticism of CCPOA leaders' decision to suspend four retired union members. He also was publicly critical of the union's decision to hire a parolee, a move that was eventually upheld by the state's Office of Inspector General.

Mike Jimenez , CCPOA's current president, declined to comment on the Novey lawsuit during a May interview, citing terms of the stipulated settlement.

Novey's bankruptcy filing shows he's taken some real estate hits, too. He owes about $272,000 on loan taken out in 2009 on a Rocklin home he first purchased in 37 years ago. In 2006 Novey bought a condo in Scottsdale, Ariz., for $154,500. He still owes about $95,000 on it, but it's valued at just $48,000, according to the bankruptcy filing.

Novey, 63, retired from the CCPOA presidency in 2002 after more than 20 years in command. During his watch, union membership exploded as California built dozens of new prisons. Novey amped up the group's influence by using the millions its members provided to sponsor tough-on-crime ballot measures, elect legislators, punish political enemies and back union-friendly gubernatorial candidates.

But the falling out with his former union and his advice to several of his law enforcement clients to back GOP gubernatorial candidate Meg Whitman last year instead of the eventual winner, Democrat Jerry Brown, dinged Novey's reputation.

The case is scheduled for a hearing Thursday in Judge Thomas Holman's courtroom at 10:30 a.m.

Click here to download the 50-page bankruptcy filing.

Your humble blogger was away from work the last few days, so we're just now catching up with a backlog of events and e-mails, including this week's oral arguments in SEIU Local 1000 v. Brown before San Francisco's 1st District Court of Appeal.

The court heard both sides and now has up to 90 days from Wednesday's hearing to render a decision. You can view the court's case docket here.

The case (formerly SEIU Local 1000 v. Schwarzenegger) continues debate over whether employees in so-called "special fund" departments were illegally furloughed. This May 27 item and its companion June 3 post can give you more context and court documents.

At stake: millions of dollars in wages lost to furloughs plus interest for tens of thousands of state employees in those special fund departments.

The Union of American Physicians and Dentists made a similar argument in another case, won in the lower court but then lost on appeal with a different panel of justices in the 1st District Court.

A third special funds case on appeal, California Attorneys, Administrative Law Judges and Hearing Officers in State Employment v. Brown, also is with the 1st District Court. There's no oral argument date set yet. Click here to see the court's calendar for that case.

The best that state workers can hope for at this point is conflicting appellate court decisions. If at least one of the 1st District Court panels upholds the lower court's ruling, the California Supreme Court would almost certainly have to specifically address the special funds argument that it avoided in the seminal PECG v. Schwarzenegger decision last October.

IMAGE: www.yolocourts.ca.gov

So what's a "special fund department," anyway?

That's a key question that San Francisco's 1st District Court of Appeal wants answered as the June 15 date for oral arguments in SEIU v. Schwarzenegger approaches.

As we reported last week, the court asked the Gov. Jerry Brown's administration and SEIU Local 1000, to answer a series of questions. Several focused on figures provided by Veronica Chung-Ng, a finance employee who found that 30 of 69 departments SEIU orginally declared were "special fund" actually received no general fund money. She also found that 62 of the 69 had money that the general fund could borrow.

A few blog users have asked if we could dredge up Chung-Ng's data. We combed though a few dozen blog posts with links to court documents and finally turned up this item, which contains a link to the court filing with the Chung-Ng declaration and spreadsheet.

Here's how to find the court document (you'll need Java to download the file):

Click here to open the file on the court document server.
The Chung-Ng declaration and list of departments are contained in the 12 pages under file No. 16249126 in the list on left margin of the page. The spreadsheet that breaks down department funding starts on page 8.

If you're a furlough lawsuit junkie (and you know who you are) the latest twist in SEIU Local 1000 v. Schwarzenegger is tailor-made for you.

Last week, San Francisco's 1st District Court of Appeal revived debate in a case that appeared was headed for a ruling. It's one of three lower court decisions that the Schwarzenegger administration lost and appealed -- and now carried on by Gov. Jerry Brown -- to overturn a trial court decision that so-called "special fund" departments should have been exempt from furloughs.

The governor has already won one of the appeals, but if the unions win at least one of the other two, it's likely the whole thing will go to the state Supreme Court. Hundreds of millions of dollars in back pay and interest are at stake.

Last week the 1st District Court vacated an earlier order that put SEIU on a path for a ruling. It ordered attorneys for the union and the state to gear up for oral arguments that must address a total of 17 legal questions. Many probe how to define a "special fund" department. Others go to earlier administration arguments about gubernatorial furlough authority.

On Monday the court set June 15 at 9:30 a.m. for the debate.

Here are the questions it put to both sides:

State workers paid with federal money or other sources outside of the general fund were legally furloughed by former Gov. Arnold Schwarzenegger, according to a court ruling issued late Monday.

The decision published by San Francisco's 1st District Court of Appeal reverses a lower court decision that parsed the legality of furloughs by the source of an employee's pay and deals a blow to a key union argument against the policy.

Union of American Physicians and Dentists v. Brown (formerly UAPD v. Schwarzenegger) was one of three parallel cases that successfully argued in trial court in 2009 that the furlough policy was illegal. Alameda Superior Court Judge Frank Roesch reasoned that Schwarzenegger's blanket furloughs failed to take into account the "varying needs of the different state agencies" as required by state law and that closing special fund departments three days per month illegally interfered with their "respective missions."

The California Statewide Law Enforcement Association's quest to apply enhanced pension benefits retroactively died a quiet death last month after the state Supreme Court declined to consider the union's appeal.

The union had asked the court to review the decision of Sacramento's Third District Court of Appeal, which had ruled that the negotiated safety retirement benefits for Bargaining Unit 7 didn't apply to service prior to July 1, 2004.

The high court's April 27 declination ends a long battle over the benefit between CSLEA and the Department of Personnel Administration. Click here for more history on the case. This link opens the court's calendar of events in CSLEA v. DPA.

IMAGE: www.yolocourts.ca.gov

Pensions & Investments, a leading financial publication that closely follows CalPERS, featured an article on Thursday that said the fund is getting a grip on scandals that have embarrassed the organization.

A couple of paragraphs from the P&I piece that comments on the investigation CalPERS commissioned and the board's reaction to it:

CalPERS trustees deserve praise for coming to grips with the dimensions of the problem, dealing with weaknesses, and strengthening structures.

The review doesn't close the case or end the need for further reforms. The pending criminal cases, and investigations by the Securities and Exchange Commission and others, could produce revelations of more abuses that CalPERS trustees will have to address.

But this review helps CalPERS get on track to overseeing the investment of its assets with proper fiduciary care.

So what do you think?

We reported on Wednesday that a federal judge has reduced what the California Correctional Peace Officers Association must pay for punitive damages in a defamation case from $10 million to about $2.5 million. Judge Lawrence Karlton's Dawe v. Corrections USA, CCPOA, et al. decision can be challenged by the plaintiffs with either a new trial that focuses on the punitive phase of the case or taken to the 9th Circuit Court of Appeal.

Here's Karlton's order:
Judge's ruling on damages awarded in Dawe v. CUSA, CCPOA
IMAGE: www.yolocourts.ca.gov

A federal judge has reduced a $10 million punitive damages award leveled against the California Correctional Peace Officers Association last year, although the plaintiffs in the case can appeal the reduction or seek a new trial that focuses on what the award should be.

Sacramento Federal Court Judge Lawrence Karlton rendered the decision last week, cutting what was a total $12.5 million decision against CCPOA -- compensatory and punitive damages awards combined -- to about $5 million.

The decision is the latest turn in Dawe v. Corrections USA, CCPOA, et al. Last October a jury unanimously found that CCPOA had spread falsehoods about Brian Dawe, a founder and former executive director/treasurer of Auburn-based Corrections USA.

CUSA is a national law enforcement coalition, and CCPOA is a member. The union eventually took over the organization's board then ousted Dawe five years ago after he raised questions about the coalition's finances.

Dawe successfully argued that the unjust firing and remarks by CCPOA officials and publications issued to explain his departure hampered his ability to earn a living and damaged his company, Flat Iron Mountain Associates. The jury awarded Dawe and his $2 millionin compensation. Another former Corrections USA employee involved in the matter, Gary Harkins, won a $315,000 defamation compensation claim against the union.

But Karlton took issue with the jury's punitive awards: $9 million to Dawe and his firm and another $1 million to Harkins. The judge lowered those amounts to match the compensatory awards. The punitive damages were "unconstitutionally excessive," Karlton said, noting that CCPOA's net worth was a factor in his decision.

That's not the end of the matter, however. Karlton gave the plaintiffs three weeks to ask for a new trial to argue for a higher punitive damages award. They also have the option to appeal Karlton's decision to a higher court.

Plaintiffs' attorney Dan Baxter couldn't be reached by phone, but he sent the following e-mail in response to a message we left with his office:

Editor's note: This post has been changed to clarify the impact of furloughs on employee pay for the 2010-11 fiscal year.

Five of six state employee unions without contracts whose members are furloughed three days per month have asked an Alameda Superior Court judge to stop the policy.

Professional Engineers in California Government, California Association of Professional Scientists, California Correctional Peace Officers' Association and California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment are the union plaintiffs in the lawsuit now before Judge Steven Brick.

The Association of California State Supervisors, which speaks on behalf of management-level exempt workers, is also a party to the lawsuit.

California Statewide Law Enforcement Association didn't join the other unions in the litigation, which names Gov. Jerry Brown as defendant.

A hearing is set for Friday, April 8, at 9 a.m. in Alameda Superior Court.

As we reported this morning, a furlough case hearing originally scheduled for 9:30 a.m. today before the 1st District Court of Appeal was put off until next month.

We now know why. Lynelle Jolley, spokeswoman for the Department of Personnel Administration, said that one of the justices who was supposed to hear the case was ill.

Look for a new date for oral arguments in Service Employees International Union Local 1000 et al. v. Schwarzenegger et al to be set for late next month.

An appeals court has set a Feb. 23 hearing to debate whether state workers in so-called "special fund" departments have been illegally furloughed.

SEIU v. Schwarzenegger involves three Alameda Superior Court decisions that determined furloughs for special-fund departments were irrational, arbitrary and interfered with those departments' ability to legally function. The rulings, which were consolidated when Gov. Arnold Schwarzenegger appealed his loss to San Francisco's 1st District Court, affected employees covered by SEIU Local 1000, the Union of American Physicians and Dentists and California Attorneys, Administrative Law Judges and Hearing Officers in State Employment.

The case went on hold while the California Supreme Court took up PECG v. Schwarzenegger, which involved the larger question of whether the governor could unilaterally impose furloughs. (No, the court said on Oct. 4, but the Legislature can and did by approving a budget that assumed furlough savings.)

Then the 1st District Court told the SEIU parties to submit new arguments in light of PECG. They did, so now we have a hearing date. Whether it will go off isn't clear. The Brown administration has asked for hearing delays in other labor litigation, including another furlough case (involving State Compensation Insurance Fund employees) with the 1st District Court. The court granted the delay in that matter.

IMAGE: www.yolocourts.ca.gov

SEIU Local 1000 has asked to join the legal fight to keep the state from selling 11 properties that former Gov. Arnold Schwarzenegger put on the sales block to help close California's budget deficit. Gov. Jerry Brown criticized the plan when he was running for office, but earlier this month said that he is weighing whether to continue the previous administration's sale lease-back plan because ending the deal would increase the state's budget gap by about $1 billion.

As the union notes in the amicus brief (embedded below) filed in the 6th District Court of Appeal in San Jose, state custodians would lose their jobs if the building sale goes through because the buyer, California First LLC, intends to use private sector employees to perform those duties.

Meanwhile, the state has pushed back the layoff date for employees affected by the pending sale. Originally their positions were set for elimination on March 30. The new date is May 1. (Click here for a previous post about the pending layoffs.)

Fans of William Shakespeare will appreciate union attorney Anne Giese's reference to "King Lear" to fortify her argument that the sale is illegal, and foolish to boot:

Since the actions of Schwarzenegger -- during repeated budget crises -- frequently appeared like tragedies of Shakespearean proportions, it is fitting, then, to compare his poor real estate decisions to those of King Lear.

You can read the rest of her analogy here. Scroll down to PDF page 9:

The Legislative Analyst's Office has taken a look a pension bill that was key to last year's budget deal and concluded that it was well-intentioned but flawed.

Senate Bill 867, authored by Republican Dennis Hollingsworth and backed by Gov. Arnold Schwarzenegger, established several new public reporting requirements and, most significantly, told CalPERS to make estimates of its unfunded liabilities based on the so-called "zero-risk rate."

The LAO concluded that the bill has "serious drafting problems" that make it needlessly alarmist or unworkable:

As part of its efforts to encourage scrutiny of CalPERS' investment return assumptions, SB 867 requires CalPERS to calculate pension liabilities in its reports to the Legislature and others using "a discount rate equal to the rate of the 10-year United States Treasury (UST) Note as of 30 days before the date of the report." This means that instead of calculating liabilities using CalPERS' annual assumed investment return (currently 7.75 percent), this report would require liability reporting assuming a much lower discount rate. As of January 21, 2010, the 10-year UST yield is 3.4 percent. Using such a lower discount rate would result in CalPERS calculating a much higher amount of liabilities and, therefore, future state and local costs, compared to standard public pension reporting methods.

Correction, Jan. 20, 11:30 p.m.: An earlier version of this post incorrectly reported that attorney David Tyra signed the letter submitted to the 3rd District Court of Appeal.

Citing "the unique circumstances" of transition to a new administration, attorneys representing Gov. Jerry Brown and Attorney General Kamala Harris have asked an appellate court to push back deadlines for submitting briefs in what has been a running feud over furloughs between the executive branch and other statewide-elected officials.

The request asks the 3rd District Court of Appeal in Sacramento to add at least 30 days to the Jan. 26 date that the first documents are due. The court had said on Jan. 11 that it wouldn't grant any extensions.

110114 Newton v. Schwarzenegger ruling
Update, 1:49 p.m.: This story has been updated with a response from CCPOA.

A judge in San Francisco has struck down a class action lawsuit over correctional officer furloughs that alleged the policy violates federal labor laws. The case is the first furlough litigation orally argued by state attorneys since Gov. Jerry Brown took office on Jan. 3.

"We are disappointed in the court's ruling today and will be reviewing the decision to determine what steps to take next." said Ryan Sherman, spokesman for the California Correctional Peace Officers Association, which backed the lawsuit.

The ruling by U.S. District Court Judge Vaughn Walker comes just one day after arguments in Newton v. Schwarzenegger. The union's attorneys argued that "self-directed" furloughs of correctional officers violated the Fair Labors Standards Act. The case applied only to members of Bargaining Unit 6.

CCPOA said that cutting employee pay but deferring the furlough time off violates the law because employees aren't paid in full for hours worked within a given pay cycle, that time worked on an unpaid furlough day should be calculated in figuring overtime and that the state hasn't kept adequate payroll records.

In essence, the judge ruled that the plaintiffs didn't make the case to support their claims or misinterpreted the policy as forcing employees to work for free. "The furlough program, while perhaps convoluted in execution, ensures that plaintiffs are compensated for all hours worked during the pay period," Walker wrote. "Because plaintiffs are compensated for all hours worked, and because that compensation exceeds federal minimum standards, plaintiffs claim of violation of FSLA fails."

And federal law, Walker said, authorizes only the secretary of labor to sue for recordkeeping violations, so "plaintiffs here lack standing to raise a separate claim relating to alleged recordkeeping violations."

Click here for a previous post with more details and documents about the lawsuit. We've embedded Walker's decision above.

Attorneys representing the state and the California's prison officers' union argued the legality of furloughs in San Francisco's U.S. District Court this morning. The court didn't issue a ruling and might not for several weeks.

The California Correctional Peace Officers Association filed the class action lawsuit, Newton v. Schwarzenegger, contending that its members' furloughs -- which deduct pay now but defer the corresponding time off -- violate the Fair Labor Standards Act. Click here for more background and court briefs.

Meanwhile, The State Worker has heard from several sources that the Department of Personnel Administration is scheduling or has already engaged in informal labor contract talks with the six bargaining units still without agreements. DPA Director Ron Yank also has been meeting and greeting leaders of the other bargaining units.

Yank's goal: Get contracts negotiated with all six units by the end of February/beginning of March.

PHOTO: Ron Yank, 2007 / Courtesy Carroll Burdick & McDonough LLP

Newton v. Schwarzenegger is set for hearing in San Francisco's U.S. District Court today at 10 a.m.

The class-action case, which applies only to members of the California Correctional Peace Officers Association, is challenging furloughs as a violation of the Fair Labor Standards Act. The arguments in this December 2009 complaint include:

• Cutting pay but deferring the furlough time off violates the law because employees aren't paid in full for hours worked within a given pay cycle.
• Time worked on an unpaid furlough day should be calculated in figuring overtime.
• The state hasn't kept adequate payroll records.

The state says in its last brief that CCPOA doesn't have standing to file suit, that there's no material fact establishing that employees haven't been compensated for all hours worked and that the assigning the eventual time off is a form of compensation under federal law.

There's a slew of documents in the case. CCPOA has posted a few on its website, but the rest are only available online through the court's electronic document system, and you have to register and then pay document fees.

Or you can look at the last two briefs that lay out each side's arguments via The State Worker's Scribd embeds:

The 1st District Court of Appeal has lifted an decision that stopped union challenges to Gov. Arnold Schwarzenegger's last furlough order, referring the matter to Alameda Superior Court for more litigation as that court "may deem appropriate."

The matter landed in the appellate court after Judge Steven. A. Brick's Aug. 8 ruling that Schwarzenegger couldn't relaunch three-days-per-month furloughs for roughly 144,000 state workers because the order violated state laws.

The governor quickly asked the appellate court to put a hold on the lower court's decision and allow furloughs to proceed. The appellate court denied that request, but the California Supreme Court, which by then was knee deep in furlough litigation, took the case and then allowed furloughs to resume.

On Oct. 4 the high court ruled that Schwarzenegger's 2009 furloughs were illegal but that the Legislature tacitly approved them in subsequent budget legislation. It didn't rule on the latest furlough case, however, and in November returned the matter to the 1st District Court of Appeal.

Now the appellate court has passed the case -- which is actually a consolidation of lawsuits by Professional Engineers in California Government, SEIU Local 1000 and six other employee groups -- back down to the Alameda court. (Click here for a list of all the parties involved.)

It's not clear whether either side should take heart from the appellate court's action, but you can be certain that there's more litigation ahead.

Just don't count on SEIU Local 1000 to be part of the proceedings. Its new contract accepted the last round of furloughs from August through October.

Here's the appellate court's instructions to the trial court:

In light of (1) the California Supreme Court's decision in Professional Engineers in California Government v. Schwarzenegger (S183411, October 4, 2010), (2) the enactment of the Budget Act of 2010, (3) the motion filed by plaintiffs in the California Supreme Court on October 26, 2010, and (4) any other potentially relevant development, the temporary restraining order that is the subject of the appeal in this action is vacated and the matter is remanded to the superior court for such further proceedings as the superior court may deem appropriate in light of these intervening developments.

Click here to read the appellate court docket, which shows the up-and-down history of the case.

The ongoing union paid leave dispute between the state's prison officers' union and the California Department of Corrections and Rehabilitation is entering a new phase next week, when a Sacramento court will rule whether the the matter should go to binding arbitration.

Editor's note, 2 p.m.: We have added a Scribd version of the Dec. 7 CASE court filing to the end of this post.

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment filed a letter brief last week with San Francisco's 1st District Court of Appeal.The union's aim: convince the justices to return a so-called "special funds" case to the trial court with "directions to reconsider its ruling in light of the (California) Supreme Court's decision."

CASE attorney Patrick Whalen's 13-page letter is a response to a Nov. 22 brief filed by the Schwarzenegger administration that argues for killing the case.

Whalen contends that the high court's ruling in PECG v. Schwarzenegger, which said the state Legislature tacitly approved furloughs by assuming payroll savings from the policy in its budget actions, left open many questions that need to be hashed out in the lower court.

CASE makes these arguments:

The U.S. 9th Circuit Court of Appeals has overturned a lower court's decision that SEIU Local 1000 didn't appropriately notify members and fair-share payers when it temporarily raised fees in 2005 and 2006.

The union raised about $12 million from the fee increase. Local 1000 attorney Anne Giese said this afternoon that if SEIU lost, it probably would have paid "nominal damages" of about $1 per union member.

The plaintiffs can ask the U.S. Supreme Court to review the 9th Circuit ruling, but the high court rarely accepts such requests.

Justices David R. Thompson and Sidney R. Thomas ruled in favor of the union with Justice J. Clifford Wallace dissenting.

The lawsuit was backed by the National Right to Work Legal Defense Foundation, which describes itself as "nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by abuses of compulsory unionism."

We'll knit together the essentials of the case from the 43-page court decision that we've Scribd at the end of this post:

Lots of ground to cover here: three unions, three lawsuits, four court filings and plenty of links to prior State Worker posts for background. Hang on.

CCPOA v. Schwarzenegger
The Schwarzenegger administration filed this brief on Tuesday in response to CCPOA's Nov. 19 filing to San Francisco's 1st District Court of Appeal. Gov. Arnold Schwarzenegger and the prison officers' union are battling over an Alameda judge's decision that "self-directed" furloughs are illegal.

The big question with this furlough case and the other two we'll mention is this: Given the California Supreme Court's October furlough decision that the Legislature tacitly approved furloughs through budget legislation, is the lower court litigation still worth considering?

Click here and then here for more background on CCPOA v. Schwarzenegger. Both posts have plenty of history and links to earlier key court documents.

There's no oral argument date set for this case.

A key court date set for the end of this month in the state worker minimum wage case has been postponed with no new date set.

Judge Patrick Marlette had scheduled the minimum wage hearing in Sacramento Superior Court for Nov. 29. The two sides were supposed to present evidence about whether the controller has the computer capacity to pay state employees minimum wage during a budget impasse.

The delay injects new uncertainty into the legal battle between the lame duck Schwarzenegger administration and Controller John Chiang. Gov. Arnold Schwarzenegger leaves office in January, and it's difficult to envision a lower court decision in the minimum wage litigation before that.

And even in the unlikely event that happens, the matter would drag well past January -- and into Gov.-elect Jerry Brown's term -- if the losing side appealed a December ruling.

Chiang has twice refused to withhold state worker pay, contending that the state's payroll technology and state payroll procedures prohibit it. Schwarzenegger has said the controller is defying established case law and cannot assume failure.

According to this court document, both sides agreed to put off the hearing:

After some discussion with all counsel, it was agreed that the November 29, 2010. Evidentiary Hearing would be vacated. The Court ordered that counsel meet and confer regarding trial dates and a briefing and discovery schedule.

We've asked the controller and the Department of Personnel Administration to explain what happened and whether this means Schwarzenegger is handing the issue off to Brown. We'll let you know what we hear.

IMAGE: www.yolocourts.ca.gov

Editor's update, 8 p.m.: This post now includes a Scribd download of the CCPOA brief filed with the 1st District Court of Appeal.

The California Correctional Peace Officers Association filed a 42-page brief on Friday, arguing that the California Supreme Court's furlough ruling last month didn't wipe out an Alameda judge's earlier ruling that "self-directed" furloughs are illegal.

"The governor says that the (Supreme Court's) ruling is a big blanket that you can throw over all furloughs," said Gregg Adam, one of the attorneys with San Francisco law firm Carroll, Burdick & McDonough, which represents CCPOA. "Obviously, we disagree."

Self-directed furloughs deduct an employee's pay at the furlough rate of roughly 15 percent per month, but the time off is deferred. The 32,000 or so correctional officers represented by CCPOA continue to work under self-directed furloughs. They're among the roughly 63,000 state workers represented by unions without current labor pacts.

Alameda Superior Court Judge Frank Roesch ruled that self-directed furloughs are illegal. Schwarzenegger appealed the ruling to San Francisco's 1st District Court, where it was on hold until the state Supreme Court ruled on furloughs last month.

The appellate court then asked the governor and the prison officers' union to update their arguments in light of the high court's decision. Schwarzenegger opened with a Nov. 9 filing (click here to read more about it).

CCPOA's response includes these arguments:

SEIU Local 1000 filed a supplemental brief in San Francisco's 1st District Court of Appeal last Friday. It's a response to Gov. Arnold Schwarzenegger's Nov. 8 filing that argues the California Supreme Court's furlough decision knocked out an Alameda judge's ruling that forcing unpaid days off on so-called "special fund" departments is illegal.

Local 1000 attorney Felix De La Torre's 19-page letter brief makes several arguments:

A state appeals court should reverse a lower court's ruling that state workers in "special fund" departments were illegally furloughed, an attorney for Gov. Arnold Schwarzenegger argues in documents filed this week in San Francisco.

Attorney David Tyra contends in two mirror-image briefs submitted to the 1st District Court of Appeal that last month's furlough decision by the California Supreme Court "fully disposes of the issues" raised in SEIU Local 1000 v. Schwarzenegger et al. and UAPD v. Schwarzenegger et al..

Nearly a year ago, Alameda Superior Court Judge Frank Roesch ruled in both cases that furloughing employees in departments funded entirely or in part with money outside the general fund was an "arbitrary, capricious and unlawful" act. He then ordered those workers returned to full hours and pay. Schwarzenegger immediately appealed, which kept furloughs in place.

Then the state Supreme Court ruled on Oct. 4 that the Legislature had tacitly approved Schwarzenegger's furloughs, which made the policy legal. On Oct. 7, the 1st District Court issued a letter to both state and union attorneys about the SEIU and UAPD cases:

Dear Counsel: As you are undoubtedly aware, on October 4 the Supreme Court filed its opinion in Professional Engineers in California Government v. Schwarzenegger, S183411. Should you conclude that the opinion does not resolve all issues in this appeal, the Court has directed me to inform you that additional briefing addressing the impact of the Supreme Court's decision may be submitted according to the following schedule. Appellants may file an initial supplemental brief no later than November 8, 2010. Respondent may file its brief on or before November 19, 2010. Appellants may file a reply brief no later than November 30, 2010.

That same day, the appellate court set a briefing schedule for California Correctional Peace Officers Association v. Schwarzenegger, another Roesch furlough ruling appealed by the governor. Click here for our recent post about that appeal.

The 1st District Court hasn't yet set a date for oral arguments in any of the cases.

What follows is Tyra's 10-page SEIU brief , which essentially says that applying the guidelines set down by the Supreme Court's ruling undercuts the Roesch decisions. (This link opens a virtually identical Tyra brief addressing the UAPD case.)

Plaintiff's brief in SEIU Local 1000 v.Schwarzenegger

An attorney for Gov. Arnold Schwarzenegger said that the California Supreme Court's Oct. 4 furlough decision has invalidated a lower court's furlough lawsuit ruling in favor of the California Correctional Peace Officers Association.

David Tyra, the administration's lead furlough lawsuit lawyer, argued in papers filed on Monday that the high court's decision settles all of the issues raised in CCPOA v. Schwarzenegger, et al..

CCPOA successfully argued to Alameda Superior Court Judge Frank Roesch that "self-directed" furloughs of prison staff and other state workers at 24/7 facilities violated labor law that stipulates compensation must be paid within a given pay cycle. The union maintained the policy is illegal because workers under self-directed furloughs may lose their pay but not take the time off for weeks, months or years.

The law also requires payment rendered in cash, but unredeemed furlough time after June 2012 would have no value, and that was illegal too, CCPOA said. After losing the case and appealing Roesch's ruling to San Francisco's 1st District Court, the administration extended the furlough redemption time indefinitely. It also said that furloughs violated provisions of the Labor Code.

Three days after the state Supreme Court issued its decision that the Legislature tacitly approved Schwarzenegger's furloughs through language tucked into a February 2009 budget bill, the 1st District Court asked the administration and CCPOA to submit arguments on how the Supreme Court's ruling impacted CCPOA v. Schwarzenegger.

Tyra filed his 15-page letter on Monday. His argument, in sum: The Supreme Court said that the Legislature OK'd the governor's furloughs as they existed, making all of CCPOA's arguments moot. The Labor Code argument doesn't hold up, either, because that law doesn't apply to state employers and employees.

The union has until Nov. 19 to respond. The governor may file a reply brief no later than Nov. 30. The court hasn't set a date for oral arguments.

Click here to read the Tyra brief. He also filed a brief in the 1st District Court for Service Employees International Union Local 1000 et al. v. Schwarzenegger et al., which concerns the legality of furloughing "special fund" department employees. We'll have that posted this afternoon, so check back.

As we reported last week, documents aren't publicly available that detailed the California Correctional Peace Officers Association's budgets and balance sheets in an Oct. 22 federal court hearing that produced a $10 million punitive damages verdict against the union. (That was in addition to about $2 million in actual damages the jury concluded CCPOA should pay.)

But the transcript of the Dawe v. CUSA, CCPOA hearing wasn't shielded. The State Worker acquired 60 pages of key testimony. They're posted below.

The conversation touches on a number of subjects, such as the decline of CCPOA's net worth; homes, cars and sports season tickets it has purchased; the union's employee payroll costs; property it owns in Southern California; member dues; the union's legal costs; it's fight with the state over union paid leave; unspecified political spending and more.

Before you start reading, here's the cast:

Mr. Nicolaysen - CCPOA chief financial officer Jeff Nicolaysen
Mr. Baxter - plaintiff Brian Dawe's lawyer Daniel Baxter
Mr. Mastagni, Sr. - David Mastagni, Sr., attorney for CUSA and CCPOA
Court - federal Judge Lawrence Karlton

101101 Jeff Nicolaysen Testimony

The State Worker has accessed the 7-page court document that details a federal jury's $10 million punitive damages verdict in Dawe v. Corrections USA and CCPOA. You can view the verdict by clicking this link.

The same jury decided that CCPOA should pay $2 million actual damages.

CCPOA has said it will appeal. The union has posted on its website an open letter explaining its side of the matter. The letter says that, "If there are any damages, those will not need to be paid until the appeal is complete - probably years from now." It also assures members that the union isn't bankrupt.

Bee columnist Dan Morain observes in today's Bee that, "The once-mighty California Correctional Peace Officers Association has fallen far." This link opens his column. Clicking here opens our report last week about the Dawe verdict and revelations in court about CCPOA's assets, revenues and spending.

We've been asking constitutional officers for reaction to new furlough instructions from the Department of Personnel Administration, acting on budget bills that allow the administration to furlough state workers.

The instructions, part of a set of Personal Management Liaison memos issued late Thursday afternoon, say that rank-and-file state employees in unions without contracts will continue furloughs of three days per month in November. That includes folks working for the lieutenant governor, the secretary of state, the treasurer, the attorney general, the controller, the superintendent of public instruction and the insurance commissioner.

(The Board of Equalization also is a constitutional agency, but it's among the eight departments and agencies whose employees are exempt from furloughs regardless of contract status.)

The California Correctional Peace Officers Association owns two homes in Sacramento, bought half the seats in an Arco Arena luxury suite as well as season passes to the local Triple A baseball team and purchased eight new vehicles last year, according to a federal court hearing this morning.

The inside glimpse into how the prison officers' union has spent its money was part of the punitive damages phase of Dawe v. Corrections USA, CCPOA, et al.. CCPOA is already on the hook for $2.3 million in damages after a jury on Monday found it guilty of defamation. Now the jury must determine how much in punitive penalties, if any, CCPOA will pay after losing the 3-year-old case in Sacramento.

(This is a very complex case, as evidenced by this 27-page verdict. For more background than we can share here, click here for Brian Dawe's side of the story and click here for CCPOA's version. )

Among the union financial figures presented at the morning hearing:

With all of the historic events of the last two weeks -- action on the state budget, the SEIU labor deal and the California Supreme Court decision on furloughs -- we almost forgot about another high-profile issue that's not yet resolved: state worker minimum-wage litigation.

Sacramento Superior Court Judge Patrick Marlette has scheduled Endsley v. Chiang for oral argument on Jan. 7. If Marlette's past decisions on furloughs and minimum wage are a guide, he'll issue a tentative decision ahead of the January hearing and then, unless an argument changes his mind, he'll quickly issue a final decision.

Between now and then, there's a Nov. 29 "evidentiary proceeding" during which witnesses will testify, possibly for an entire week. Each side will then submit more documents to Marlette, which he'll consider in the days leading up to oral arguments.

We don't know yet what the California Supreme Court will say about furloughs this morning, but we do have a sense of how the court reached its decision.

Here's a quick sketch of how the court writes its rulings:

Next week, The State Worker blog will host an hour-long chat about the California Supreme Court's much-anticipated Monday morning furlough ruling. You can plug into the live session right here on Tuesday from 11 a.m. to noon. We'll take questions and ask some of our own during what is sure to be a lively 60 minutes.

(Yes, we know it's not an ideal time, but we'll be tied up Monday with the court news. Another chat has been scheduled for the noon hour on Tuesday. We figured Wednesday was too late. So we picked the least-bad time for our event.)

If you can't join the conversation live, you can replay it later on this blog, since The Bee archives chats.

IMAGE: sacbee.com/live

The California Supreme Court has just announced that it will publish its decision in the state worker furlough matter, Professional Engineers in California Government, et al. v. Schwarzenegger, et al. on Monday at 10 a.m. There's no tip in the announcement what the court has decided.

The ruling will affect more than 200,000 state employees forced to take unpaid days off by Gov. Arnold Schwarzenegger since February 2009. State workers absorbed 46 furlough days through June 30 of this year, cutting approximately $3 billion from state payroll costs. About half of that was general fund savings.

In August, after state budget talks deadlocked, Schwarzenegger restarted the "Furlough Friday" policy, which closes the government the second, third and fourth Fridays of the month until a 2010-11 budget deal is done.

SEIU Local 1000, which represents 95,000 state employees and unions for state attorneys and state engineers all sued the governor over the order nearly two years ago and lost in Sacramento Superior Court. The state Supreme Court last summer decided to take the three cases as one and ordered a quick schedule that culminated in a Sept. 8 hearing in San Francisco.

The court had 90 days after the hearing to render its decision, but legal experts figured a ruling would come much sooner, given the high-profile nature of the case and its potential impact on the state's budget.

There are roughly 40 furlough lawsuits in various lower courts around the state, but legal experts say Monday's ruling could settle them.

The state Supreme Court also took a fourth furlough case involving employees at the State Compensation Insurance Fund. It hasn't yet been scheduled for a hearing.

Click here to read the California Supreme Court's notice.

The California Supreme Court has just announced that it will publish its decision in the state worker furlough matter, Professional Engineers in California Government, et el. v. Schwarzenegger, et al. on Monday at 10 a.m. There's no tip in the announcement what the court has decided.

Click here to read the court's notice.

A Sacramento Superior Court judge has ruled that Gov. Arnold Schwarzenegger's and the Department of Personnel Administration's refusal to recognize Lincoln's Birthday and Columbus Day as state paid holidays violated collective bargaining laws.

In the same decision, Judge Timothy Frawley said that overtime rule changes enacted by the Legislature and enforced by the administration were legal.

Today's decision affects about 105,000 state workers represented by unions that were party to the lawsuit: SEIU Local 1000, California Association of Professional Scientists and California Association of Psychiatric Technicians.

Frawley's final writ is pending, but CAPT attorney Steve Bassoff said that the decision means that state workers in bargaining units covered by those unions will get whatever holiday compensation is owed to them for time worked on Columbus Day last year or Lincoln's Birthday this year.

"Whatever their contract provides for, that's what's in effect," Bassoff said this afternoon.

The unions acknowledged that lawmakers and Schwarzenegger changed state law last year to eliminate Columbus Day and Lincoln's Birthday as paid holidays. They also acknowledge that their contracts expired long before the holiday legislation.

But the three unions told Frawley that the Dills Act, which spells out state labor contract rules, keeps the provisions of expired contracts in place until new terms are negotiated. They argued that the administration's actions -- which included disciplining anyone who continued treating the holidays as a paid day off -- violated the law.

SEIU President Yvonne Walker flatly told members last fall that, "October 12, 2009, is a holiday and employees should not come to work."

Frawley agreed that lawmakers didn't supersede the Dills Act with last year's holiday legislation. Since the union contracts specified Columbus Day and Lincoln's Birthday were paid days off, the compensation terms for those days remained in force.

Today Walker said, "It's unfortunate that these questions had to be asked and litigated.
at a significant cost to the state, especially when it didn't need to happen."

Walker predicted that the administration will appeal, "no doubt."

The State Worker has contacted the administration for comment. It's not clear what the administration's position will be regarding Columbus Day on Oct. 11.

An administration appeal would automatically freeze any back wage payments to state workers and could allow the state to continue the no-holiday policy while the case runs through the court system. The unions could ask the court to go ahead with paying state workers while the case is appealed.

Frawley's ruling covers Columbus Day holidays and Lincoln's Birthday holidays denied since February 2009. His ruling for CAPT excludes holidays occurring after July 1 of this year, since the union has agreed to a contract from that date through July 2012 that eliminates both holidays.

The judge sided with the administration's position that changes to the law that eliminated counting leave time toward the threshold for overtime was legal. That change was part of the same legislative package that eliminated the two paid holidays.

"From the notebook" posts give State Worker blog users insights, notes and quotes that went into news stories that we write.

We quoted Athena Roussos, an Elk Grove-based appellate attorney who has argued before the California Supreme Court, in this story about the California Supreme Court hearing in the PECG v. Schwarzenegger furlough case.

Roussos said plenty more about the hearing when we spoke on Wednesday afternoon. Here are some of her thoughts after viewing the oral arguments:

Wednesday's California Supreme Court hearing is dead ahead, set for Wednesday morning at 9 a.m. and scheduled to run for 90 minutes. Here's a previous post with details about how you can watch the oral arguments in Professional Engineers in California Government v. Schwarzenegger on TV or the Internet.

It's been a long road to this key moment. Looking back at the 1,900 posts on this blog since it started a little over two years ago, references to the state Supreme Court taking and furloughs case go back to early 2009. We're talking about 60 items on The State Worker.

We'll be attending the hearing. Between now and then, we'll be looking through past stories and court filings leading up to the case and writing a bit for tomorrow's Bee. If you want to do the same, here are some links. Many of the blog posts link to court filings or other pertinent info:

The California Supreme Court has announced it will broadcast Wednesday's 9 a.m. oral arguments in Professional Engineers in California Government v. Schwarzenegger.

The California Channel will air events live on cable television and on its website, www.calchannel.com. We expect the hearing will run about 90 minutes.

The justices will hear debate over whether Gov. Arnold Schwarzenegger illegally furloughed state workers. The case has repercussions for roughly 40 furlough lawsuits in lower courts around the state.

The court will rule within 90 days, although legal experts we've interviewed expect a published decision much sooner. Click here to read more about what to expect during the state Supreme Court hearing and after it.

Hat tip to blog user M for flagging this.

As we reported here, CalPERS and CalSTRS have filed a Petition for Writ of Mandate to the state Supreme Court, seeking to block Gov. Arnold Schwarzenegger's July 28 furlough order.

Click here to download the 126-page brief.

As noted in this July 26 post, Gov. Arnold Schwarzenegger's tussle with Controller John Chiang over state worker minimum wage will see some court action this week.

Look for Judge Patrick Marlette to issue a tentative ruling by this afternoon on several technical legal points raised by Chiang about the governor's July 1 minimum wage order.

Here's an example from filed Chiang's 28-page cross-complaint:

Some state employees covered by the Pay Letter are paid salary or wages from continuing appropriations or from other funding sources not requiring legislative action. The Pay Letter fails to exempt those employees from its terms or otherwise to provide the Controller with lawful instructions regarding payment to such employees, contrary to state law.

Furloughs for state workers are back on for Friday. The state Supreme Court has just said that it will review a lower court ruling that kept Gov. Arnold Schwarzenegger from furloughing roughly 144,000 employees last week as he had planned.

Schwarzenegger had asked for the review after losing decisions in both Alameda County Superior Court and San Francisco's 1st District Court of Appeal.

Here's what the court's website says:

The petition for review is GRANTED. Because the issue whether the Governor has the authority to direct the unpaid furlough of state employees is pending before this court and is scheduled for oral argument on Wednesday, September 8, 2010, in the related case of Professional Engineers in California Government et al. v. Arnold Schwarzenegger et. al., S183411, and without expressing any view on the merits of that issue, we conclude that it is appropriate to grant review in this matter and defer further action pending our resolution of the currently pending proceeding. Pending further order of this court, further proceedings in the Alameda County Superior Court in case number RG10494800 (and in consolidated cases numbered RG10507922, RG10507081, RGI0503805, RGI0501997, RGI0516259, RGI0514694, and RG10528855), as well as the temporary restraining order of the Alameda County Superior Court issued on August 9, 2010, are stayed. Votes: George, C.J., Kennard, Baxter, Chin, Moreno, and Corrigan, JJ.

Now we wait.

Attorneys representing Gov. Arnold Schwarzenegger met a 9 a.m. deadline today to file the final brief in litigation that could determine whether furloughs resume this week for roughly 144,000 state employees.

The governor's side filed this response to yesterday's arguments by state employee unions that lower court decisions that have stalled Schwarzenegger's July 28 furlough mandate shouldn't be reviewed by the High Court.

Schwarzenegger is arguing that the Supremes should consider the matter because, he contends, Alameda Superior Court Judge Steven A. Brick erred by granting a temporary restraining order that kept Schwarzenegger from resuming furloughs last Friday. The governor says that the First District Court of Appeal compounded that error by denying his appeal to lift the restraining order while the lower court case moves forward.

With this morning's filing, the Supreme Court has all the documentation that it requested. If it renders a quick decision in the governor's favor, "Furlough Fridays" could return this week. A ruling against the governor would stop furloughs until at least next month when more court action is scheduled. A new budget deal or tentative agreements with individual unions between now and then also could affect state employees' work schedules.

Attorneys for eight state employee organizations have filed a response to Gov. Arnold Schwarzenegger's request that the state Supreme Court allow him to furlough state workers while it reviews an appellate court decision that kept him from restarting the policy last Friday.

The employee groups' answer, a 26-page letter hand-delivered to the court's San Francisco offices, argues a review isn't warranted.

Schwarzenegger's attorneys last week asked the First District Court of Appeal for permission to restart furloughs, despite a trial court decision that stopped the policy pending a full hearing on Sept. 13. The appellate court denied the request.

The governor took up the matter with the state Supreme Court last week, calling the policy "one of the aggressive cash management measures" needed to "preserve vital cash assets." The appellate court got it wrong, his lawyers contended, and they also attacked the trial court's ruling:

SEIU Local 1000 filed amended papers on Thursday in Alameda Superior Court update previous arguments that furloughing "special fund" department employees was abritrary and that the policy itself violates labor laws and contractual agreements between the unions and the state. The amendments include the governor's July 28 order.

Click here and here to read Local 1000's amended complaints. The court hasn't yet set a date for hearing the case.

Earlier reports by The State Worker and other media have said the new round of furloughs ordered by Gov. Arnold Schwarzenegger will hit about 156,000 state workers.

That's not quite right.

UPDATE, 1:20 p.m.: SEIU Local 1000 attorneys are planning to ask Alameda Superior Court Judge Steven Brick to issue a temporary restraining order on Monday that would stop Gov. Arnold Schwarzenegger's order. The union is suing to stop furloughs of its members who work in "special fund" departments.

As we reported Tuesday, CalPERS has asked State Controller John Chiang to continue issuing full pay to its 2,300 or so employees, despite Gov. Arnold Schwarzenegger's new furlough order.

Here's what SCO spokesman Jacob Roper said when we asked whether Chiang would honor CalPERS' request or the governor's order:

"It is our intention to implement the pay letter, pending judicial determination, as there is a hearing on the special fund cases next week."

PHOTO: Controller John Chiang answers a question during an interview at The Bee's Capitol Bureau in July. Hector Amezcua / Sacramento Bee.

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment has filed a complaint in Alameda Superior Court seeking a temporary restraining order to stop Gov. Arnold Schwarzenegger's new furlough order from being implemented.

The complaint says that the new furloughs illegally reduce Bargaining Unit 2 members' pay and that the policy oversteps the governor's authority. The case is set for a hearing on Monday.

Click here to read the verified complaint for declaratory and injunctive relief. This link opens the union's ex parte application for order to show cause. Here's CASE's memorandum of points and authorities.

On another front, CASE has filed an unfair labor practice complaint with the Public Employment Relations Board.

The complaint alleges that Schwarzenegger has engaged in reprisals and bad-faith bargaining "by ordering that they suffer furloughs and a 14% salary reduction simply because CASE has refused to agree to the Governor's and DPA's proposals in bargaining."

Click here to download the charges filed Monday. You can open the request for injunctive relief by clicking here.

DPA has until Wednesday at 5 p.m. to respond, according to this letter from PERB.

Gov. Arnold Schwarzenegger's hand-picked guy for lieutenant governor isn't furloughing his tiny staff.

"The Office of the Lt. Governor contracts with the Senate for its human resources services and is governed by their personnel regulations, which do not include furloughs at this time," said Erin Shaw, Lt. Gov. Abel Maldonado's communications director, in an e-mail to The State Worker.

We had asked whether Maldonado would furlough his seven employees after noticing that he had pulled his office out of a furlough lawsuit appeal that was backed by his predecessor, John Garamendi. After Garamendi won a congressional seat last year, Maldonado assumed the office in April after his appointment by Schwarzenegger and a lengthy and contentious confirmation.

Garamendi, a vocal critic of furloughs, was one of the Democratic statewide office holders -- the so-called "constitutionals" -- whom Schwarzenegger sued for refusing to furlough their employees. The constitutionals have maintained that the governor can't legally dictate how they run their operations and that they have avoided furloughs by finding other ways to save money.

Here are the other constitutional officers: Attorney General Jerry Brown, Secretary of State Debra Bowen, Treasurer Bill Lockyer, Controller John Chiang, Superintendent of Public Instruction Jack O'Connell and the members of the Board of Equalization.

Insurance Commissioner Steve Poizner, the lone Republican constitutional officer at the time, didn't furlough his people but also stayed out of the legal fight.

The constitutionals lost at the trial court level and appealed the decision to Sacramento's 3rd District Court. There's been no hearing date set for the case.

On June 30, Maldonado asked for his office to be dismissed from the appeal.. The appellate court granted the request on July 2.

Look for SEIU Local 1000 attorneys to attack Gov. Arnold Schwarzenegger's latest furlough order on Wednesday when they file an amendment to an existing lawsuit now in Alameda Superior Court.

Local 1000 isn't yet going after a temporary restraining order which, if granted, would stop furloughs cold for its members.

During a scheduled hearing on Friday, Local 1000 lawyer Felix De La Torre asked Judge Steven Brick if the union could add complaints about Schwarzenegger's latest furlough order to a lawsuit the union filed in May. That lawsuit was the second to list a number of "special fund" departments that Local 1000 says should be exempt from furlough.

Brick gave the union until Wednesday to file its amendment. Schwarzenegger's side will then have a few days to respond. There's been no hearing date set.

The state Supreme Court has set Sept. 8 to hear oral arguments in the furlough cases it recently decided to take up. The hearing, according to the court's website, will be held at 9 a.m. in San Francisco.

It's not clear how long after the hearing that the court will render a decision.

Click the following links for earlier State Worker coverage of the Supreme Court's decision to consider take up furloughs:

California Supreme Court takes case on state worker furloughs
Why the Supremes said 'no,' then 'yes' to furlough review
Did Schwarzenegger and chief justice talk about furlough litigation?
The State Worker: Sometimes the conspiracy dots don't connect
State Supreme Court snaps up more furlough lawsuits
Poll: Furlough arguments months away; budget before or after?

A Sacramento Superior Court hearing today wound up pushing back the date for when attorneys will again debate whether Controller John Chiang must issue minimum wage paychecks to state workers. The upshot: No minimum wage for state workers now at least through September, and quite possibly well beyond that.

Instead, "other issues" will be discussed during an Aug. 26 hearing and "the infeasibility argument will take place some time in the future," said Ryan Endean, spokesman for PECG and CAPS, two of the unions that have supported Chiang's position.

It's not clear when the court will hear infeasibility arguments. The case hinges on expert testimony and analysis, so the two sides will need time to compile their evidence and witnesses, exchange the information and then break down the opposition's arguments.

"So by our understanding," Endean said, "we're looking at full wages at least through September, if not beyond."

The caveat: If the budget fight drags on, Gov. Arnold Schwarzenegger could order more furloughs. Click here for a recent post about that.

Gov. Arnold Schwarzenegger on Wednesday asked the state Supreme Court to add SEIU Local 1000 v. Schwarzenegger to the list of furlough cases under the high court's review.

The governor is hoping the court will overturn an appellate ruling that upheld trial court Judge Charlotte Woolard's decision that furloughing SEIU-covered employees at the State Compensation Insurance Fund violated California insurance code.

Among the arguments that Schwarzenegger attorney David Tyra makes:

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment on Wednesday filed an unfair labor practice charge against Gov. Arnold Schwarzenegger and the Department of Personnel Administration.

The union, which represents about 3,800 state legal professionals, contends that the governor and DPA have engaged in bad faith bargaining and violated aspects ofWhite v. Davis by issuing a pay letter that attempts to "punish" CASE members:

The issuance of the pay letter is thus a patent example of the administration
attempting to ensure that CASE members receive no wages despite the fact that even
under the administration's own reading of White v. Davis, those CASE members
employed in positions funded out of a continuous appropriation are entitled to their full
salaries. The pay letter thus represents an example of the administration attempting to
punish CASE members for failing to agree to the Governor's demands.

This link opens the document filed with the Public Employee Relations Board. Click here for the union's e-mail to CASE members about the complaint.

That e-mail also mentions that DPA on Monday tried to intervene in CASE v. Chiang and State Compensation Insurance Fund. San Francisco Superior Court Judge Peter Busch denied the request but left open the door for the administration to apply again. CASE v. Chiang challenges technical aspects of Schwarzenegger's minimum wage order. Click here for more info about that case.

A couple of State Worker blog users have asked a question: Does the same state Supreme Court decision that Gov. Arnold Schwarzenegger has invoked to issue minimum wage orders in 2008 and this month also preclude appropriating payroll funds outside of the annual budget?

CAHP, CAPT, CDFF, UAPD, AFSCME and IUOE have tentatively agreed to labor contracts that shield their members from minimum wage in the event of a budget impasse. Controller John Chiang has said he won't comply with Schwarzenegger's latest minimum wage order because the state's payroll system is inadequate, both technologically and legally. He and the governor are suing each other in Sacramento Superior Court.

The 2003 Supreme Court decision that the governor has relied on as he has pressed the minimum wage issue, White v. Davis, contains this section:

All week long, a list of 1,300 people accused of being in Utah illegally has been the focus of a state investigation. Now it appears a state worker, or group of workers, is behind it. Click the viewer to see the latest report by KSL 5 News, Salt Lake City.

Sacramento Superior Court Judge Patrick Marlette told attorneys at the outset of this morning's hearing that he is leaning against granting Gov. Arnold Schwarzenegger's request for a temporary restraining order to compel Controller John Chiang to pay state employees minimum wage.

The hearing has just begun, though, and lawyers, left, will make their arguments before Marlette issues a final ruling.

PHOTO CREDIT: Jon Ortiz, Sacramento Bee

The State Worker is heading to Sacramento Superior Court's Department 19 this morning to hear minimum wage litigation oral arguments set for 11 a.m. before Judge Patrick Marlette.

The debate won't be about whether Controller John Chiang is making a sound legal argument that he can't legally or physically withhold state workers' pay during the budget impasse. Attorneys for the Department of Personnel Administration and the controller have filed plenty of paper on that issue, and Marlette is apparently ready to publish a decision today about that matter.

Instead, attorneys this morning will argue two points: If Chiang loses, should Marlette directly order the controller to comply with the law and Schwarzenegger's minimum wage order? And should four unions be allowed to join Chiang in the minimum-wage legal battle?

State workers won't have to wait to find out what Sacramento Superior Court Judge Patrick Marlette thinks about Controller John Chiang's arguments against issuing minimum-wage paychecks.

Marlette's court clerk, Barbara Freitas, said that the judge will publish a decision on Friday after an 11 a.m. hearing. Judges sometimes wait days or weeks to render a decision.

Marlette will not issue a tentative ruling ahead of time, however, according to a notice that the court issued today.

Judges will often issue tentative rulings before they hear oral arguments. In January 2009, Marlette issued a tentative ruling in favor of the governor's furlough authority prior to a hearing on the matter. What he heard didn't change his mind, and the tentative ruling became final. Furloughs started a few days later.

(Thanks to Blog User T for flagging the court notice for The State Worker.)

IMAGE: www.yolocourts.ca.gov

Editor's note: This item was published on Tuesday. Since then, several blog users have asked for June 23 and June 30 court documents referenced at the end of the post. We're republishing the item here with links to the those filings at the end of the post.

Attorneys for Gov. Arnold Schwarzenegger have filed a new brief with the state Supreme Court in PECG v. Schwarzenegger (Case No. S183411) The document is a response to a "friend of the court" brief filed on June 24 by Attorney General and Democratic gubernatorial candidate Jerry Brown and several of his fellow constitutional officers.

Litigation over state worker minimum wage has been moving so quickly that we're just now catching up to the news that Controller John Chiang filed a court papers late Tuesday opposing Gov. Arnold Schwarzenegger's minimum wage pay order.

You can download the opposition brief here. It's a continuation of the legal back-and-forth that restarted last week.

The filings include these declarations by former state payroll chief John Harrigan, Chiang, consultant Brent Ehrman and others who say that the state payroll system cannot turn on and turn off minimum wage in a way that complies with Schwarzenegger's order without running afoul of federal law.

The SCO also commissioned public accounting and consulting firm Crowe Horwath to study the payroll system. The firm issued this study, dated July 2, that backs up the minimum wage arguments that the controller has made.

Another report dated July 11 lays out several options to get the SCO in position to execute a minimum wage withholding during a budget impasse. It concludes that the best options would require up to four years and up to $11.7 million to implement. Even those would be "partial" solutions.

PHOTO: Gov. Arnold Schwarzenegger speaks with State Controller John Chiang after he delivered an address to the state Legislature last month. The two are at odds again over pay for state workers. / Hector Amezcua, 2009 Bee file

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment have sued State Controller John Chiang and State Compensation Insurance Fund to keep the controller from implementing minimum wage.

In a letter to members, CASE says it filed its complaint in San Francisco Superior Court on Wednesday to challenge the legality of the governor's pay instructions on several points:

(I)t seeks to exempt from its coverage those bargaining units that have already reached tentative agreements with the administration, the fact that the pay letter violates principles of equal protection, and the fact that the pay letter fails to exempt employees paid out of continuously appropriated funds (like those CASE members at State Fund), both of which are in direct contravention of the California Supreme Court's decision in White v. Davis (2003) 30 Cal.4th 528. We believe our lawsuit raises the best legal theories to protect all CASE members from the threat of reduced or no wages.

Click here to read the CASE e-mail to members.
This link opens the CASE complaint.
Open the declaration of CASE President Peter Flores Jr. by clicking here.
Clicking here opens CASE's Points and Authorities.

Attorneys for the Schwarzenegger administration on Tuesday filed a brief in Sacramento Superior Court that argues state employee unions shouldn't be allowed to enter the minimum wage fight between the governor and State Controller John Chiang.

As reported here, California Association of Professional Scientists and Professional Engineers in California Government on Monday filed a motion to be a party in the minimum wage litigation flying back and forth the last week or so. SEIU Local 1000 and CCPOA have done the same. All the unions are siding with Chiang. A hearing is set for Friday at 11 a.m.

The administration's brief argues that the unions haven't proven that they have reason to inject themselves into the minimum wage battle and that the court should deny their request. Click here to read the court filing.

(Side note: We asked Judge Patrick Marlette's clerk whether the judge would issue a tentative ruling on Thursday. As of last night, no decision had been made.)

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Related stories:

State pay cut could ravage Sacramento region

Chiang pleads poor technology in resisting wage cut

The unions are zeroing in on minimum wage.

California Association of Professional Scientists and the Professional Engineers in California Government on Monday filed a motion to be a party in the minimum wage lawsuit. The two groups would be on Controller John Chiang's side. In an e-mail to The State Worker, Lisa Marie Burcar, spokeswoman for both organizations, summarized the legal questions the lawsuit will probe:

Among the issues before the court are which employees will be working overtime, which requires full payment of salary; which employees are currently paid through an appropriation which doesn't have to wait for the State Budget; whether it is feasible for the Controller to turn paychecks off and on each month; and whether a court should base a ruling on the assumption that the Legislature will continue to fail to pass a State Budget within the Constitutionally-required timelines.

Click here to read the PECG/CAPS motion to intervene.

This link opens the declaration of state worker Wilburn Thompson about how reducing wages to the federal minimum would impact him.

Union lobbyist Ted Toppin's declaration looks more broadly at the hit to PECG and CAPS members. He also notes that some have already worked overtime this month and that many will probably continue to do so through the end of the July pay period. Click here to read the Toppin declaration.

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In a lengthy and detailed e-mail to its members on Thursday, CASE lays out what's happening with contract talks ("... the Bargaining Team will continue to negotiate ..."), litigation ("... we have filed numerous briefs in our various furlough lawsuits ...") and minimum wage ("... , it is possible that pay for the July pay period ... could be in jeopardy ...")

In an analysis of the promise made by Schwarzenegger that unions with tentative agreements won't be subject to minimum wage, the CASE letter notes:

Professional Engineers in California Government and the California Association of Professional Scientists on Wednesday filed a brief in the state Supreme Court.

The filing concerns PECG v. Schwarzenegger (Supreme Court Case No. S183411), one of three early furlough cases that were in the 3rd District Court of Appeal before the high court took them up last month. Furlough appeals by SEIU Local 1000 and California Attorneys, Administrative Law Judges and Hearing Officers in State Employment have been combined with this case. We'll post those unions' briefs later.

The governor will file one more brief by mid-July, in response to an argument filed by Attorney General Jerry Brown and several other constitutional officers who have sided with the unions.

It's furlough litigation filing season at the California Supreme Court.

As you'll recall, the state's highest court has scooped up several furlough cases for review and has asked the various parties to submit responses to questions about the legality of the governor's policy.

First up: CASE v. Schwarzenegger (Supreme Court Case No. S182581), which challenged furloughs of 500 State Compensation Insurance Fund attorneys based on California insurance code that prevents "staff cutbacks" at the fund. California Attorneys, Administrative Law Judges and Hearing Officers in State Employment won in San Francisco Superior Court and prevailed again when the governor appealed.

The state Supreme Court in May took the case for review on its own initiative, although the circumstances surrounding that decision have proven somewhat controversial.

Click here to read the CASE brief, which seeks to answer the court's reason for review: "Does the Governor have the authority to furlough the state employees at issue in this case by executive order?"

Then click here for the brief filed on behalf of State Fund, which didn't want to furlough its employees, did anyway, and then came out against the policy in court. And this document registers the fund's Opposition to Request for Judicial Notice, which seeks to keep the governor's side from introducing documents "that were either not part of the record" in the earlier court cases or "are irrelevant" to the Supreme Court's specific review.

The governor's side filed an opening brief on June 9 and has until July 9 to respond.to CASE and State Fund's briefs. It's doubtful that the court will schedule a hearing before September. Click here for more about that.

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We've received several e-mails from State Worker blog users laying out this scenario:

Let's say in the next few days that Controller John Chiang loses his appeal to overturn the Gilb v. Chiang, the court decision that he overstepped his bounds in 2008 by refusing to issue minimum wage checks to state workers.

Then 2010-11 budget talks drag past the June 30 end of the fiscal year. The Department of Personnel Administration then issues pay letters that instruct Chiang to withhold state workers' pay to the minimum allowed by federal law.

Then what? Would the controller go ahead and issue full-wage checks anyway? We asked Chiang spokesman Jacob Roper that question. Here's what he said:

Sacramento's 3rd District Court of Appeal will hear oral arguments in Gilb v. Chiang this morning at 9:30 a.m. We expect the hearing to run an hour or a little longer.

The appeal is contesting a lower court decision that Controller John Chiang overstepped his authority in 2008 by refusing to comply with Department of Personnel Administration pay letters ordering state workers' pay temporarily withheld to the federal minimum wage. Then-DPA Director Dave Gilb sued Chiang in Sacramento Superior Court and eventually won.

The controller's office circulated a memo to state employee unions earlier this month, speculating on today's hearing and its eventual outcome: "Given the 3rd DCA's right-leaning composition and its past history of adverse rulings relating to labor interests, we should prepare for a ruling which affirms the trial court's decision," the memo says. "If this occurs, the Controller may be ordered to pay minimum wage as early as the July payroll, which is scheduled to be paid on August 1st."

Click here for our June 10 story about the memo. Read the memo by clicking here.

We're planning to attend this morning's hearing. Check back later for our report on the proceedings.

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A new post on Controller John Chiang's website mentions state employee payroll is one of several obligations that his office will continue to pay even if lawmakers fail to pass a budget by the end of this month.

Chiang spokesman Jacob Roper said that the payroll figure, $2.1 billion for July, comes from Gov. Arnold Schwarzenegger's May budget revision and assumes the payroll cost reductions he has proposed for fiscal 2010-11. The governor has proposed cutting all state workers' pay by 5 percent and upping their pension contributions by another 5 percent of their gross pay, but there's no sign an agreement will be in place before the fiscal year begins July 1 to implement the pay cuts.

The controller also sent this letter to lawmakers, triggered by their usual failure to get a budget done by the June 15 deadline laid out in the constitution.

"At a time when the economy is showing signs of recovery, we can ill-afford the 'business as usual' approach of requiring the state to be driven to the brink of a fiscal meltdown before compromise is achieved."

This story by Bee Capitol Bureau colleague Jim Sanders has more about the largely symbolic deadline.

A recent e-mail from blog user D, who regularly corresponds with The State Worker and contributes to the blog behind the scenes, summed what many folks are saying as June 30 approaches:

There are four significant dates that state workers will be watching and two significant events that could happen any time:

The 1st District Court of Appeal has ruled against Gov. Arnold Schwarzenegger's appeal of Judge Charlotte Woolard's judgment in SEIU Local 1000 v. Schwarzenegger. The union's lawsuit successfully argued that furloughing State Compensation Insurance Fund employees violated state insurance code.

Click here for the details of the appeal, which sought to overturn the ruling -- or to at least to return Woolard's blanket back pay decision to the lower court for more argument.

Aside from the back pay argument, the governor's appeal mirrored his recent bid to overturn CASE v. Schwarzenegger. The administration lost that appeal as well. The state Supreme Court, on its own authority, has taken up that case and three others.

We expect this one will go to the California high court as well.

Click here to read the appellate court's decision.

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"From the notebook" blog posts give you the notes, quotes and details that inform news stories that we write for The Sacramento Bee.

Our story in today's Bee references a internal memo written by Controller John Chiang's Chief of Staff, Collin Wong-Martinusen, that lays out the possible financial and legal repercussions if Gov. Arnold Schwarzenegger successfully orders state worker pay withheld to the federal minimum.

We confirmed with the controller's office that Wong-Martinusen wrote the unsigned document, which was issued on plain paper and sent to state labor leaders.

The memo speculates on a worst-case outcome of Chiang's appeal of a trial court decision that he lacks the authority to reject DPA pay letters to temporarily withhold employee wages during a budget impasse. The appeal is set for oral arguments in the 3rd District Court of Appeal on June 21, nine days before the end of the fiscal year.

And at the end of the memo, Wong-Martinusen suggests reaching out to U.S. Labor Secretary Hilda Solis and get her read on whether a minimum wage order violates of the Federal Labor Standards Act. Solis was one of more than two dozen California Congressional representatives who opposed withholding state employee wages during the 2008 budget impasse.

Around the same time the memo was circulated, SEIU Local 1000 told its members to brace themselves for a temporary pay reduction.

Click here to read the memo.

The California Supreme Court has taken over the three original furlough cases decided by Sacramento County Superior Court Judge Patrick Marlette. Those cases were pending in Sacramento's 3rd District Court of Appeal.

All the documents filed in the appellate court will be treated as though they had been filed in the Supreme Court.

Breaking news from New York via the Associated Press:

A federal judge on Friday halted attempts by New York's governor to impose furloughs on about 100,000 state workers and withhold their raises.

U.S. District Judge Lawrence Kahn had temporarily blocked the furloughs two weeks ago. His new preliminary injunction bars Gov. David Paterson and lawmakers from submitting or enacting short-term funding bills with those provisions.

The unions went to court, arguing the cost-saving moves changed the terms of their negotiated contracts in violation of the U.S. Constitution. One-day-a-week furloughs were part of one emergency spending bill approved by the Legislature, though the Senate also passed a resolution criticizing the plan. Raises have been withheld in several of the emergency bills, which are being used each week to keep the state running until a budget is finalized.

Click here for the full story.

Attorneys for Gov. Arnold Schwarzenegger and SEIU Local 1000 are scheduled to debate furloughs this morning in San Francisco's 1st District Court of Appeal.

They're arguing the merits of Judge Charlotte Woolard's decision that furloughing employees at State Compensation Insurance Fund violated insurance code preventing "staff cutbacks" at the fund. Click here for more about the legal saga that led to all of the SEIU-represented employees -- and everyone else at the fund -- receiving furlough back pay plus 7 percent.

The SEIU case mirrors the litigation that the state Supreme Court earlier this month decided it would review, CASE v. Schwarzenegger. The governor lost an appeal of CASE with the 1st District Court of Appeal. That same court is hearing today's arguments.

Click here for our Furlough Fights spreadsheet, which lays out the status of furlough litigation in courts around the state.

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Space constraints limit our State Worker column on Thursdays to roughly 400 words, so much of what we learn in the ramp up to writing it never sees print. Column Extras give State Worker blog users more information -- the notes, the quotes and the documents behind the weekly feature.

Our State Worker column in today's Bee looks at the latest furlough litigation conspiracy theory that Gov. Arnold Schwarzenegger and state Supreme Court Chief Justice Ronald George secretly agreed to trade judicial budget funding for a furlough litigation decision by the high court.

Since writing about the meeting in this Friday blog post, we've had time to look a bit more deeply at how the state's highest court operates, the chief justice's role in the system and the fiscal relationship between the court and lawmakers.

We'll share some of that background information in a few posts today. For starters, check out at the Judicial Council website by clicking here. You can read a fact sheet about the council by clicking here. Check out the expenditures for the judicial branch by clicking here. Page 6 has spending totals for fiscal 2008-09.

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Here's an e-mail The State Worker received from Mark Sollitt, an Elk Grove-based attorney who took exception to our May 6 column, "Furlough litigants shop for judges."

Sollitt gave us permission to post his unedited e-mail, which was sent on May 7. (Owing to the volume of e-mail The State Worker receives, we didn't see it until Monday).

McGeorge School of Law professor and private-practice attorney Athena Roussos is one of several legal experts we consult when writing about pivotal moments in furlough litigation. Last week we quoted Roussos in this story about the state Supreme Court taking up CASE v. Schwarzenegger.

This morning Roussos e-mailed The State Worker with a few more thoughts about why the court took the case less than a month after it rejected Gov. Arnold Schwarzenegger's request that it consolidate and consider seven others. With her permission we're posting the e-mail here, unedited:

Our May 6 State Worker column, which looked at "judge shopping" and whether it works in furlough lawsuits, prompted plenty of comments and calls, including a critical letter from an authoritative reader: the Hon. Steve White, Sacramento Superior Court's presiding judge.

Here's the top of White's May 17 letter:

Click here to read the rest of the judge's criticism.

Court Files posts introduce lawsuits of interest to state workers. We highlight the case, link you to the file and show you where to track developments on your own.

• Click on the case number below to download the file. (9 pages)
• Check for subsequent filings on the Sacramento Superior Court's document viewing page. Plug the case number into the appropriate field, click the search button and then scroll down to see a list of documents filed.

Case No.: 34-2010-80000521
Filed: 4/23/2010
Petitioners: California Correctional Peace Officers' Association and Charles Alexander
Respondents: California Department of Corrections and Rehabilitation and Matthew Cate

Case summary: The union, citing the California Public Records Act, in February requested information on how much CDCR has spent litigating and settling lawsuits back to 2007. CCPOA says the department failed to respond, so the union is suing.

We contacted CDCR and asked a few questions:

• Did the department in fact receive the request and fail to respond in a timely fashion?
• If so, why did the department fail to respond?
• Is the department going to respond now? Has the information requested been deemed exempt?

CDCR spokesman Paul Verke is checking. We'll let you know what we hear.

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So how much do politics play a role in the decisions that judges render in trial court furlough lawsuits?

Of the 15 furlough lawsuit decisions rendered by six Superior Court judges so far, Gov. Arnold Schwarzenegger has won nine, and unions and other dissenting entities have won six. Here's a chart of the rulings split up by party affiliation of the governor who appointed the judge:

Fairness alert: Any judge would say that he or she rules on the basis of the law, not personal political leanings or the party affiliation of the governor who appointed them. This blog isn't in a position to divine otherwise.

And a judge who ruled for Schwarzenegger in one case could rule against him in another because the arguments made in the second case might be completely different. Indeed, Judge Charlotte Woolard, a Pete Wilson appointee to the bench in 1995, did just that by siding with Schwarzenegger twice and with SEIU Local 1000 once.

You can click here to view a more detailed list of the lower court rulings, the judges and the governors who appointed them.

And our newest Furlough Fights spreadsheet, which lays out all the lawsuits, litigants and court locations, is available by clicking this link.

Last week's decision by the state Supreme Court to reject Gov. Arnold Schwarzenegger's furlough lawsuit consolidation request prompted many State Worker blog users to e-mail or call with questions about the ruling:

How many members of the court were involved in the decision?

All seven justices weighed in. Justice Joyce Kennard was the only one who indicated she would have granted the governor's request.

The court's ruling was very brief. Will the court publish more about the decision?

Click the following link for the answer to this question and others about the state Supreme Court's decision.

The furlough showdown in Sacramento's 3rd District Court of Appeals is getting closer.

Professional Engineers in California Government and California Association of Professional Scientists today filed a supplemental reply letter brief to the 3rd District Court of Appeals in Sacramento. California Attorneys, Administrative Law Judges and Hearing Officers in State Employment filed its papers, too. We expect SEIU Local 1000 will soon do the same.

The court will then set a date for oral arguments and then rule on the cases. Exactly when will all that happen? No one knows yet.

Regardless, expect the losing side to appeal to the state Supreme Court, which earlier today declined Schwarzenegger's request that it immediately take over the Sacramento appellate cases and three others in San Francisco's 1st District Court.

Click here to read the brief that PECG and CAPS filed today. We're working on getting the CASE papers to post.

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A few quick notes on furlough lawsuits around the state:

We've discovered two petitions filed in Alameda Superior Court in March. Both make similar arguments that "self-directed" furloughs violated labor law and both were filed by Carroll Burdick & McDonough, the same firm that successfully argued that point on behalf of CCPOA. Here are the parties and links to the court documents:

Mar. 12 - IUOE v. Schwarzenegger, Case No. RG10503805

Mar. 30 - CSLEA v. Schwarzenegger, Case No. RG10507081

Those two cases bring the furlough lawsuit total to 31 launched in the trial courts since December 2008. Other stats:
• Schwarzenegger has won nine trial court decisions.
• Unions have won six and dropped four cases.
• Schwarzenegger has lost one appellate court decision.
• Nine cases are on appeal.
• Schwarzenegger has peititioned the state Supreme Court to take up seven of the nine cases in the appellate courts.

This link will open the updated Furlough Fights spreadsheet, which lays out info to all the litigation with links to documents and a who's who of the litigants and court locations.

Thanks to blog user L for lending a hand with this post.

A Sacramento judge has ruled against the California Association of Psychiatric Technicians in a year-old lawsuit that sought to overturn furloughs for its members. The union argued that Gov. Arnold Schwarzenegger's "self-directed" furlough policy violates labor law.

CCPOA successfully argued that same position last year in Alameda Superior Court (click here for details), but Sacramento Superior Court Judge Timothy Frawley didn't address the issue at all in his decision.

Click the following link to read the key excerpt from the ruling.

It's official. Furlough Fridays will continue.

San Francisco's 1st District Court of Appeal has issued a ruling on Gov. Arnold Schwarzenegger's third petition for writ of supercedeas. Like the previous decisions (which you can read about here and here), the court has decided to keep furloughs in place for state workers in "special fund" departments named in CASE v. Schwarzenegger while the matter is appealed:

The petition for writ of supersedeas is granted as follows: Pending consideration of the appeal on file herein, and subject to further order of this Court, the "Order Granting in Part Motion for Relief From Automatic Stay," filed March 23, 2010 in Alameda County Superior Court Number RG- 09-453982 is stayed.

The decision keeps furloughs in place for those employees throughout the appeals process, despite Alameda Superior Court Judge Frank Roesch's order last month that the governor end the policy for state workers in one of the so-called "special fund" departments named in lawsuits brought by CASE, SEIU Local 1000 and Union of American Physicians & Dentists.

Schwarzenegger asked the 1st District Court to keep furloughs in place during the appellate process. He won temporary stays in all three cases on Mar. 30. Today's decision, like the two that preceded it, is specifically about extending the stay on Roesch's order, not the legal underpinnings of his ruling that employees in special-fund departments have been illegally furloughed.

Click here to open the court's Web site. Scroll to the bottom to read today's ruling.

San Francisco's 1st District Court of Appeal has again sided with Gov. Arnold Schwarzenegger by deciding to keep furloughs in place for state workers in "special fund" departments named in SEIU Local 1000 v. Schwarzenegger while the case is appealed.

The governor is fighting a lower court ruling in this case and two others. Alameda Superior Court Judge Frank Roesch last month ordered workers restored to full hours and pay if they worked in one of the departments named in lawsuits brought by Local 1000, CASE and Union of American Physicians & Dentists.

Schwarzenegger then asked the 1st District Court to keep furloughs in place, winning temporary stays in all three cases on Mar. 30. This latest decision makes the temporary stay permanent while the court considers Schwarzenegger's appeal.

Here's the wording of the ruling, which you can find on the court's Web site:

The petition for writ of supersedeas is granted as follows: Pending resolution of the appeal herein, the "Order Granting in Part Motion for Relief from Automatic Stay," filed March 23, 2010, in Service Employees International Union Local 1000, and Yvonne Walker v. Schwarzenegger et al., Alameda County Superior Court Number RG-09-456750, is stayed. The stay will remain in effect until issuance of the remittitur or upon further order of this court.

The appellate court on Monday issued a similar decision in the UAPD case, as we reported here. The court hasn't yet issued a ruling on the governor's third stay request in the CASE matter.

The 1st District Court of Appeal has granted Gov. Arnold Schwarzenegger's petition for writ of supercedeas in Union of American Physicians and Dentists v. Schwarzenegger. The decision means that furloughs continue during the appeal of Alameda Superior Court Judge Frank Roesch's decision to end furloughs for state workers in "special fund" departments named in the lawsuit.

Here's the language from the San Francisco-based court's Web site:

The petition for writ of supersedeas is granted as follows: Pending resolution of the appeal herein, the "Order Granting in Part Motion for Relief from Automatic Stay," filed March 23, 2010, in Union of American Physicians and Dentists v. Schwarzenegger et al., Alameda County Superior Court Number RG-09-456684, is stayed. Unless otherwise ordered, the stay will dissolve upon issuance of the remittitur. *Before: Jones, P.J., Simons, J. and Needham, J.

It's highly likely that the court will make similar rulings in the mirror writs the governor requested while he appeals Roesch's decisions in similar trial court lawsuits won by CASE and SEIU Local 1000.

So how long will it take for the appellate to render a decision on Schwarzenegger's appeal? We have no idea. The courts move at their own pace. And there's still a possibility that the state Supreme Court could decide to intervene in these three furlough cases and four others. Click here for more about that.

Adam Zapala, the attorney representing the Union of American Physicians & Dentists in its fight against furloughs, has sent us a copy of the brief he filed this week in the 1st District Court of Appeal. Like CASE and SEIU Local 1000, UAPD is arguing that the temporary stay should immediately be lifted on Alameda Judge Frank Roesch's order to return "special fund" department employees to full hours.

Gov. Arnold Schwarzenegger last week won a temporary stay from the appellate court that kept state workers on furlough. The unions and the governor are fighting over whether the appellate court should lift that stay or keep it in place during the governor's appeal.

Click this link to download the UAPD brief. This link opens our post about Local 1000's court filing. Clicking here will open more about the CASE opposition brief.

SEIU Local 1000 has filed a 72-page document opposing Gov. Arnold Schwarzenegger's request that the 1st District Court of Appeal in San Francisco allow furloughs to continue while the state appeals a lower court's order to end the policy for "special fund" department employees.

Schwarzenegger won a temporary stay last week.

Yesterday's SEIU filing , which you can read by clicking here, is the second of three union opposition briefs filed with the court. CASE filed on Tuesday, as we reported here. We've asked UAPD attorney Adam Zapala for the third brief.

So when might the 1st District Court act? Any time. Will the court lift the stay and put special fund department employees back to work? Who knows? But barring some 11th-hour decision today that restores the Alameda order, tomorrow is a regular "Furlough Friday."

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You've read the arguments. Now it's your turn to weigh in.

Gov. Arnold Schwarzenegger wants the state Supreme Court to consolidate and consider seven furlough cases now under appeal and suspend all other trial court action. Failing that, the governor wants the state's highest court to consolidate the cases in Sacramento's 3rd District Court. Click here to read more about his request to the court.

All but one of the parties involved in those cases filed responses with the court by last week's deadline. Here's a review (click the links for detailed info):

CASE opposes the governor's request outright.
PECG and CAPS support parts and oppose parts.
SEIU Local 1000 supports some of Schwarzenegger's request and opposes some of it.
The constitutional officers, including Attorney General (and Democrat candidate for governor) Jerry Brown, oppose.

The sixth party, Union of American Physicians & Dentists, didn't take a position. In an e-mail to the State Worker, UAPD attorney Adam Zapala said, "(W)e did not file an answer or otherwise oppose the request to transfer the cases to the California Supreme Court."

Here's today's poll question:

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From the notebook posts give State Worker blog users insights, notes and quotes that went into news stories that we write.

Our story in today's Bee looks at the temporary stay issued on Tuesday by the 1st District Court of Appeal in response to Gov. Arnold Schwarzenegger's writ of supercedeas.

We had asked SEIU Local 1000 for comment, but we filed our story before receiving this e-mailed response to our request from union spokesman Jim Zamora:

The state Court of Appeal has temporarily blocked an Alameda Superior Court judge's order sending non-General Fund state employees back to work. That means that Local 1000-represented employees should observe Friday, April 2 as a furlough day.

SEIU Local 1000 Attorney Felix De La Torre pointed out that the court's decision to re-impose the stay is not based on the merits of either side's arguments.

"The stay was granted strictly to preserve the status quo until the court can decide whether to lift the furloughs while the appeal is being decided," De La Torre said. "It says nothing about the merits of the appeal. It is a precautionary action to give the justices time to make a decision."

SEIU Local 1000 President Yvonne Walker said the Tuesday's court action was just another step in a long battle.

"We will continue to aggressively fight these furloughs - which have already been found illegal by a trial court - until our workers are back at their jobs and receiving full pay."

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The 1st District Court of Appeal has issued a temporary stay in the SEIU case, the last of the three petition for writ of supercedeas cases that we've been following throughout the day. The language of the order isn't yet posted to the court's Web site, but we have the document image.

Click here to view it. The two-page PDF includes the court's earlier UAPD order.

The 1st District Court of Appeal has just issued a temporary stay in the second of the three furlough cases that Gov. Arnold Schwarzenegger appealed on Monday. This one blocks Alameda Judge Frank Roesch's Wednesday order in Union of American Physicians & Dentists v. Schwarzenegger. It mirrors the the CASE v. Schwarzenegger temporary stay that we reported this morning.

Here's the language of the temporary stay:

Pending consideration of the writ of supersedeas on file herein, and subject to further order of this court, the "Order Granting in Part Motion for Relief From Automatic Stay," filed March 23, 2010, in Union of American Physicians and Dentists v. Schwarzenegger, et al., Alameda County Superior Court Number RG-09-456684, is temporarily stayed. On or before 10:00 a.m., Wednesday, April 7, 2010, respondents shall serve and file opposition, if any, to the petition for writ of supersedeas. The Clerk of Court shall provide telephone notice of this order to all parties in addition to service by mail.

The appellate court hasn't yet issued a ruling on the governor's petition to block Roesch's SEIU decision. That's the last of the three petit