Dept. of Corrections v. State Personnel
Board
Filed 8/5/13 Dept. of Corrections v. State Personnel Board
CA3
NOT TO BE PUBLISHED
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE
DISTRICT
(Sacramento)
----
DEPARTMENT OF
CORRECTIONS AND REHABILITATION,
Plaintiff and Respondent,
v.
STATE PERSONNEL BOARD,
Defendant and Respondent;
AMERICAN FEDERATION OF
STATE, COUNTY, AND MUNICIPAL EMPLOYEES LOCAL 2620, AFL-CIO,
Real
Party in Interest and Appellant.
C068744
(Super. Ct. No. 34201080000722CUWMGDS)
This appeal
involves the use of private contractors to perform state functions. The Department
of Corrections and Rehabilitation (CDCR) entered into contracts with
private contractors to provide mental health services to parolees pursuant to
Penal Code section 3073.
name="_ftnref1" title="">[1] On behalf of the CDCR employees it
represents, the American Federation of State, County, and Municipal Employees
Local 2620, AFL-CIO (AFSCME) sought administrative review by the State
Personnel Board (the Board), which concluded the contracts were invalid under
civil service laws prohibiting state agencies from contracting with private
entities to perform services customarily or historically performed by state
employees. (Cal.
Const., art. VII.)
title="">[2] CDCR filed a petition for writ of
administrative mandamus. (Code Civ.
Proc., § 1094.5.) The trial court
granted the petition, ruling that the personal services contracts were valid
under the “new state function†exception to the
section 19130, subdivision (b)(2).
in reweighing the evidence before the Board, and the evidence supported the
Board’s determination that the services did not comprise a new state
function.
We affirm the judgment.
In 1954,
CDCR established the Parole Outpatient
Clinic (POC) program to reduce recidivism by helping parolees with mental
health problems successfully reintegrate into the community. In 1999, CDCR implemented the Mental Health
Services Continuum Program (MHSCP), consisting of (1) a Transitional Case
Management Program for the Mentally Ill (TCMP-MI), which provides prerelease
assessments of inmates identified as part of the prison’s mental health
services delivery system, and (2) POC, which provides mental health
assessments and treatment during parole.
Treatment consists of medication management, group therapy, and
individual therapy to parolees at high risk of criminal behavior due to mental
illness. POC staff conduct evaluations
and provide outpatient services and medication management in CDCR parole
offices located throughout the state.
POC does not provide housing or inpatient care. POC staffing includes clinical social workers
and psychologists.
In 2007,
the Legislature enacted Penal Code section 3073, (fn. 1,
counties in providing day treatment programming and mental health
mental health problems. The statute
expressly authorizes CDCR to contract for those services.
Offender Rehabilitation Services Act of 2007, which was enacted in response to
federal court cases regarding California prison overcrowding. (Sen. Rules Com., Off. of Sen. Floor
Analyses, 3d reading analysis of AB 900 (2007-2008 Reg. Sess.) as amended
April 26, 2007, pp. 6-8.)
Among the purposes of the legislation was to “require[] CDCR to
implement and significantly enhance anti-recidivism
programming including substance abuse treatment, mental health care, and
academic and vocational education.â€
(Office of Assem. Floor Analysis, 3d reading analysis of AB 900
(2007-2008 Reg. Sess.) as amended April 26, 2007, p. 1.)
In response
to the enactment of Penal Code section 3073, CDCR developed a program
called Integrated Services for Mentally Ill Parolees (ISMIP) to fill a gap in
services between POC’s outpatient role and a 72-hour hold for parolees who were
a danger to themselves or others or gravely disabled under Welfare and
Institutions Code section 5150 (5150 hold).
for varied levels of care, supportive/transitional housing resources, and an
array of mental health rehabilitative services that assist with the development
of independent living for mentally ill parolees in the least restrictive
environment possible.
As attested
to by ISMIP manager Robert Storms, the resources, facilities and services for
the ISMIP program could not be adequately provided by POC, and therefore CDCR
tried to contract with counties for these services under Penal Code
section 3073. However, CDCR was
able to contract with only two county providers -- San Francisco and Santa
Clara. Other counties contracted for
these services privately. Accordingly,
CDCR sought private contractors to meet the benchmark required by Penal Code
former section 7021, subdivision (a)(8), that “At least 300 parolees
are being served in day treatment or crisis care services, pursuant to Section
3073.â€
CDCR issued
a Request for Proposal (RFP) No. 6000000037.
Cal. Code Regs., tit. 2, § 547.59 et seq.) The project introduction of the
RFP references CDCR’s authority pursuant to Penal Code section 3073
to contract for “Mental Health Crisis
intervention . . . services.â€
(Italics added.) The RFP
described the responsibilities of ISMIP case managers
as including a complete assessment of the parolee’s needs and goals,
development of a personal services plan, linkage with all appropriate community
services, housing referrals, monitoring the quality and follow through of
services, providing necessary advocacy to ensure receipt of services, and
providing individualized coaching to achieve the parolee’s goals. The RFP said each individual personal
services plan was to contain objectives, which could include but were not
limited to, provision for housing and employment, application for entitlements
(Social Security, Medi-Cal, Veterans benefits), coordination and access to
mental health services such as medications, psychiatric and psychological
services, substance abuse services, family support and consultation services,
and access to academic education or skills training.
In 2009,
CDCR contracted with private companies to provide the personal services of
mental health personal services coordinator to parolees, with the intent
of “promot[ing] self-sufficiency in reducing recidivism for mentally ill
parolee-clients. This appeal involves six
contracts -- four with Telecare Corporation, one with Turning Point of
Central California, Inc., and one with Quality Group Homes, Incorporated.
Each Agreement Summary contained
the following general statement of purpose or Agreement Outline: “Contract is necessary in order for the
[CDCR], Division of Adult Parole Operations, to provide rehabilitation,
reduce homelessness, and reduce recidivism among the mentally ill parolee
population.†Each Agreement Summary
stated as Justification for Contracting Out that, under Government Code
section 19130, subdivision (b)(3), “The services contracted are not
available within civil service. Contract
is for the care/placement of mentally ill inmates/parolees requiring job
training and life skills. The CDCR
currently does not own or operate this type of facility.â€
In November
2009, AFSCME filed with the Board an administrative challenge to the six
private contracts. (Pub. Contract Code,
§ 10337.)
title="">[11] AFSCME sought disapproval of the contracts on
the ground they called for private contractors to perform the same work as
civil service employees.
CDCR sought
dismissal of the challenge, because the contracted services were for ISMIP and
were not services provided by CDCR employees.
The Board
directed CDCR to provide copies of the contracts, which it did, and invited
AFSCME to file a supplemental brief, which it did not.
In March
2010, Board Executive Officer Suzanne M. Ambrose issued a decision (Pub.
Contract Code, § 10337, subd. (c); see fn. 11, ante), concluding CDCR failed to establish that the contracts were
permitted under Government Code section 19130, subdivision (b) (see
fn. 3, ante). She concluded civil service clinical social
workers could provide the same
services as the contractors and stated she did not need to address
psychologists. She said AFSCME asserted
the private contractors performed work similar to civil service employees in
the same settings and under the same conditions, but “AFSCME offered no
evidence to show that the work ‘settings’ and ‘conditions’ of the
employees represented by AFSCME are similar to those of the contractors. Nonetheless, it is necessary to examineâ€
whether the asserted similarity had factual support. She said the purpose of the contracts was to
provide individuals in the ISMIP project a safe, clean, drug-free environment
to facilitate rehabilitation and reduce homelessness and recidivism among
mentally ill parolees. The contracts
required the contractors to assess parolees’ needs/goals, develop
parolee-driven personal service plans (Plans), link parolees with all
appropriate community services, make housing referrals, monitor the quality and
follow-through of services, provide necessary advocacy to ensure that parolees
receive the services in their Plans, and provide individualized coaching. Under the contracts, the Plans had to help
parolees find the most independent and least restrictive and immediate,
transitional or permanent housing feasible in the local community; help
them get jobs or productive activity; secure benefits from Social Security,
Medi-Cal, and Veterans Affairs; help parolees self-manage serious mental
illness; coordinate access to mental health services such as medications,
psychiatric and psychological services; provide parolee-directed services for
psychosocial rehabilitation and recovery; provide substance abuse services; help
secure parenting and family support and provide consultation, peer group
support, or self-help group support; create and maintain a support system of
friends and family and facilitate participation in community activities; help
parolees access academic education or career-specific trade or skill training;
and help in transition upon discharge from parole.
The Board
Executive Officer said these services appeared to be within the customary
duties of civil service clinical social workers. According to the Board’s
job specifications, clinical social workers are required to conduct
assessments and summarize case information for use in diagnosis, treatment, and
dispositional release of disabled inmates; diagnose and/or collaborate in
the formulation of a diagnosis; develop, monitor and modify treatment plans in
collaboration with the interdisciplinary treatment team; identify and recommend
appropriate services based on assessments; provide individual and group therapy
as delineated in the treatment plan; provide suicide and crisis risk assessment
and intervention; participate in risk assessment, evaluation, and
recommendation for alternative level of care placement, release to the
community, or other case disposition; coordinate discharge planning activities
and act as a resource on accessing appropriate community support and services
upon release; respond to requests from clients, family members, courts and
community agencies; consult with colleagues; prepare social work reports; and
participate in training and research.
CDCR has the prerogative to assign clinical social workers specific
duties such as assessing disabled parolees’ needs, devising detailed and
individualized planning, assisting parolees in obtaining appropriate community
services, education, housing, eligible benefits, and trade/occupation,
coordinating access to health care, facilitating their efforts to achieve or
maintain a productive life, and providing general advocacy for disabled
parolees. The Executive Officer stated,
“It is not difficult to see that these duties are the very tasks required under
the Contracts.â€
The
Executive Officer’s comparison did not take into consideration work days or
work hours. Nevertheless, the Executive
Officer concluded CDCR had failed to establish that the contracts were
permitted under any exception in section 19130, subdivision (b).
In April
2010, CDCR appealed the Executive Officer’s decision to the Board. (Cal. Code Regs., tit. 2,
§ 547.66.)
title="">[12] CDCR submitted a declaration from ISMIP
manager Robert Storms, that “Services provided by the contractors include[]
crisis care, including in[]patient services for enrolled parolee-clients;
vocational training; housing referrals and linkage; parolee transportation; and
administrative support, office space and necessary equipment.â€
satisfactorily by civil service employees within the counties in which these
services were contracted.â€
On
August 3, 2010, the Board conducted a hearing at which it heard testimony
in the form of oral statements.
name="_ftnref14" title="">[14] AFSCME representative Cliff Tillman stated
that services under the contacts were not “new†and were being performed and
could be performed by existing CDCR social workers or psychologists.
Sean Carey,
a CDCR clinician at the Victorville POC, acknowledged some of the contract
services “are the things that we don’t do.â€
He said “day treatment†was regularly performed, but mostly with
“enhanced outpatient†clients (EOPs) who require such services the most. He said, “we would very much like to do more,
if given the opportunity, but we are doing this and we are capable of it. [¶] As
far as monthly and every few weeks, . . . it was alluded to that our
services are haphazard. The only reason
why these would be haphazard would be due to scheduling conflict, not that we
can’t do this. We would love to do
this. And in many areas, it isn’t that
we’re not doing it. For the most
critical of clients, we do.†The only
individuals Carey sees on a regular basis, i.e., once or twice a week, are sex
offenders. POC can arrange transport via
agents or ambulance for suicidal or homicidal parolees. POC can arrange housing for sex offenders. Carey claimed private contractors are not
aware of the locations of schools, parks, and “temporary daycares,†to ensure
that housing for sex offenders is a sufficient distance to comply with
Jessica’s Law. Carey said “[t]he
contract is almost a job description of what we do.â€
Amy Kim, a
CDCR licensed clinical social worker out of POC’s in the Los Angeles area and a
chair of a POC steward’s council, stated, “we’ve always wanted to be able
to do more.†She stated CDCR clinicians,
psychiatrists, social workers and psychologists were unhappy that AB 900 money
was going to private contractors instead of to “existing rehab people to
beef up the services we want to do and can do.â€
Debra Webb,
a CDCR psychologist at a Los Angeles POC, stated that POC clinicians travel to
clients’ homes and “[w]e’d like to be able to do more of that.†She said CDCR provides housing and has
contracts for some of the EOP’s. She
sees some of her clients more than once a week.
Clients who have crisis issues “know how to call crisis
lines,†and they can call their parole agent, go to a hospital, call a hospital,
or call 911. She agreed mentally ill
clients need additional services.
A Board
member asked, “What specifically can private contractors provide that our state
civil service professionals cannot?
Bottom line, what is it?†Storms
responded “24-hour access, seven days a week, 365 days a year inpatient
care, structured mental health board and care, facilitated care. Things that we do not have; they do not
exist.â€
Dr. Webb
said, “. . . Actually, that’s not really what’s happening; they
aren’t really providing those services out there. What they do is the same kinds of things [
board and care, help them get access to hospitals on a 5150 basis when
they need to. And, by the way, you have
to be a peace officer to do that, so our agents help with that. We do give them resources for the 24-hour
care.†Dr. Webb said the private
contractors “are providing lists of community services for individuals who
. . . need medical treatment.
We do the same thing: We give them
lists of services; we will make phone calls for them for clients that
aren’t able to do that; we help them find the housing; we help them find
the SOR housing in downtown L.A.; we do applications for disabled bus
passes. . . . [¶] We help them with a whole array of wraparound
services. It does not appear that the
outside provider is really doing anything that we don’t.†Dr. Webb did not say POC provides any of
these services on a 24/7 basis.
Carey
stated: “. . . Nowhere in the
contract does it say that these individuals have to maintain a -- a 24-hour
inpatient service. And what they do is
they’re going to refer to county. And
that’s the same thing that we do. And it
is 24 hours, because they have 24-hour access to the parole agent who, if
they are suicidal or homicidal -- which the contracts can deal with -- if they
are suicidal or homicidal, they will take them into county, no different than
we would.â€
Storms
said, “The contract does require that they have 24-hour response to the -- they
provide a hotline; each contractor has to provide 24-hour, seven-day[]-a-week
access. [¶] Peace officers do not certify 5150’s. It’s mental health staff that certifies
5150’s, and our staff cannot. Peace
officers present individuals for 5150’s.
Our peace officers are not necessarily available 24 hours a
day.â€
On
September 7, 2010, the Board issued a resolution adopting the Executive
Officer’s decision and disapproving the contracts. The Board found:
1. CDCR failed to demonstrate the services
are a “new state function†under section 19130, subdivision (b)(2),
because it did not prove, in addition to legislative authorization, that the
service truly comprised a new governmental activity and not merely expansion of
an existing function. The Board cited
its decision in a previous matter -- In
the Matter of the Appeal by California Department of Forestry and Fire
Protection (2001) PSC No. 01-04 (CDF).
2. CDCR failed to demonstrate that the
contracted services cannot be performed satisfactorily by civil service
employees under section 19130, subdivision (b)(3), the “nature of the
services†exception, because AFSCME adequately showed that state employees in
their current positions perform the same services that are provided under the
contracts.
3. CDCR failed to demonstrate that the
contracted services are justified under section 19130,
subdivision (b)(8), because CDCR did not provide credible evidence to show
what specific “equipment, materials, facilities, or support services†the
contractor will provide at specific locations that could not feasibly be
provided by the state.
Since the
contracts had already been executed, the Board gave CDCR six months to
transition from private contractors to civil service employees.
On
November 29, 2010, CDCR filed the operative pleading -- a first amended
petition for writ of administrative mandate and first amended complaint for
declaratory relief, naming the Board and AFSCME as defendants and AFSCME as
real party in interest. The pleading
alleged the Board failed to perform an act required by law and made findings
unsupported by the evidence. The hearing
on the petition and complaint took place on April 8, 2011.
On
May 25, 2011, the trial court entered judgment in favor of CDCR. The judgment incorporated the court’s ruling
under submission. The trial court said
the Executive Officer improperly focused on the “nature of the servicesâ€
test of section 19130, subdivision (b)(3) -- i.e., “whether the tasks and
skills required by the contracts can be adequately, competently, and
satisfactorily performed by civil service employees†-- and ignored the “new
state function†test of section 19130, subdivision (b)(2). The court noted that the “Executive Officer
did not make any factual findings relating to the ‘new state function’
test, i.e., whether the contracted services displace existing state civil
service functions or, instead, embrace new functions not previously
undertaken by the state or covered by an existing agency.†The court also noted that the Board
concluded CDCR failed to prove new state function, but that the Board made
no express factual findings to support this conclusion. The court said the Board’s decision
necessarily implied a finding that
the contracted services duplicate or displace existing civil service functions,
but no substantial evidence supported this implied finding. To the contrary, undisputed evidence
showed the contracted services represented a new government program
intended to “fill a gap†in service for mentally ill parolees between
POC and 5150 holds. The court said
the Board and AFSCME took “too literal an approach†in maintaining that the
contracted services were an expansion of an existing state function. POC workers can and do provide mental health
services, but “they do not provide 24/7 crisis care in an in[]patient setting,â€
and “[t]his is the novelty of the contracted services which renders them a new
state function.†The court concluded
CDCR had the right to enter into the contracts because the contracted
services were a “new state function†under section 19130,
subdivision (b)(2), and the Board abused its discretion in concluding
otherwise. The trial court directed
issuance of a peremptory writ of mandate commanding the Board to set aside its
decision and issue a new decision concluding the contracts were valid.
Standard of Review
On appeal,
we review the Board’s decision, applying the same standard as the trial
court. We ask whether the Board’s
findings are supported by substantial
evidence. (Pan v. State Personnel Bd. (1986) 180 Cal.App.3d 351,
357.) We uphold the Board’s factual
determinations if they are supported by substantial evidence in light of the
whole record (Code Civ. Proc., § 1094.5, subd. (c)), and all
reasonable and legitimate inferences must be drawn in support of those findings
(Pan, supra, at
p. 357).
“Substantial
evidence†is relevant evidence that is reasonable, credible, and of solid value
that a reasonable mind might accept as adequate to support a conclusion. (California
Youth Authority v. State Personnel Bd. (2002) 104 Cal.App.4th
575, 584-585 (California Youth Authority).) Different from the substantial evidence test
in other contexts, the substantial evidence standard in State Personnel Board
cases requires that reviewing courts consider all evidence, including that which fairly detracts from the
evidence supporting the Board’s decision.
(Id. at p. 586.) However, we do not reweigh the evidence and
must indulge all presumptions and resolve all conflicts in favor of the Board’s
decision. (Camarena v. State Personnel Bd. (1997) 54 Cal.App.4th
698, 701 (Camarena).)
The Board’s
legal conclusions, however, are reviewed de novo. (Yamaha
Corp. of America v. State Bd. of Equalization (1998)
19 Cal.4th 1, 7.) We give deference
to an agency’s interpretation of statutes affecting issues within its
administrative sphere. (Camarena,
p. 701.) But “an agency’s
interpretation of a statute or regulation is contextual: Its power to persuade is both circumstantial
and dependent on the presence or absence of factors that support the merit
of the interpretation.†(
statute is an exercise of the judicial power . . . conferred upon the
courts by the Constitution and, in the absence of a constitutional provision,
cannot be exercised by any other body.’ â€
(Ibid.) Thus, it is our duty to construe
statutes. (Ibid.)
“New State Function†Test
AFSCME
argues the trial court’s judgment must be reversed because the trial court
applied an improper legal standard for the “new state function†test which
would invalidate a private contract only if it literally displaced civil service
employees by firing them or laying them off.
We disagree with AFSCME’s contention that the trial court misapplied the
law.
The
purposes of the constitutional civil
service provision (fn. 2, ante)
are “ ‘(1) to encourage efficiency and economy in state government,
and (2) to eliminate the “spoils system†of political patronage by
ensuring that demonstrated fitness--rather than political considerations--spurs
all appointments to public service.’ â€
(California Correctional Peace
Officers Assn. v. Schwarzenegger (2008) 163 Cal.App.4th 802, 821;
see id. at pp. 820-821 [private
contracts with out-of-state private prisons to house California inmates during
declared emergency of prison overcrowding did not violate civil service
mandate].) Courts have interpreted the
civil service mandate as forbidding private contracting for services that are
of a kind that persons selected through civil service could perform adequately
and competently. (California Correctional Peace Officers Assn., supra, at
p. 821.) Exceptions to this rule
are set forth in section 19130. (
Here, as
the trial court observed, the Board’s reliance on its prior decision,
decision confused the “nature of the services†test of section 19130,
subdivision (b)(3), with the “new state function†test of
subdivision (b)(2) (fn. 3, ante).
Under the
“nature of the services†test, the question is whether the services at issue
employees, regardless of whether they in fact are being so performed. (Professional
Engineers in California Government v. Kempton (2007) 40 Cal.4th
1016, 1033 (Kempton);
Transportation (California
Transportation Ventures) (1993) 13 Cal.App.4th 585, 593 (
(1937) 9 Cal.2d 126, 135.) If the
services could be performed by civil service employees, contracts to private
contractors cannot be justified under the “nature of the services†test. (Ibid.)
In
contrast, the “new state function†test allows private contracts “ ‘if the
state seeks to contract for private assistance to perform new functions not previously undertaken by the state or covered by
an existing department or agency.’ â€
(Kempton, supra, 40 Cal.4th at p. 1033, original italics;
7 Cal.App.3d 390, 397-400 [permitting state to hire private insurance
carriers to administer state Medi-Cal program].) “ ‘[I]f the services . . .
agency, the contract is permissible.’ †(Professional
Engineers v. Dept. of Transportation (1997) 15 Cal.4th 543, 549 (
italics.) As our high court has noted,
the “nature of the services†test is inapplicable if the state seeks to
contract for the performance of new functions not previously undertaken by the
state. (Id. at p. 549, citing Williams,
supra, 7 Cal.App.3d at
pp. 397-400; Kennedy v. Ross
(1946) 28 Cal.2d 569, 571-574; San
Francisco v. Boyd (1941) 17 Cal.2d 606, 618-620.)
The “new
state function†test calls for a function not performed
by any existing agency of state government.
Under this test, courts ask whether contracted services “displace
existing state civil service functions or, instead, embrace a new state
activity or function.†(
p. 593.) “The key in such cases is
whether a contract displaces the civil service.†(Savient
Pharmaceuticals, Inc. v.Department of Health Services (2007)
146 Cal.App.4th 1457, 1467, italics omitted.) The reason for this inquiry is that “the
civil service mandate is aimed at protecting ‘the existing civil service
structure,’ and does not compel the state ‘to fulfill every new state function
through its own agency.’ †(
p. 549.) Section 19130,
subdivision (a) is “carefully crafted to permit personal service contracts
to achieve cost savings only when they will have no detrimental effect on the
integrity of the civil service system.â€
(California State Employees’
(1988) 199 Cal.App.3d 840, 846; see id.
at p. 844 [rejected facial challenge to constitutionality of
section 19130, subd. (a)].)
“The statute combines considerations of efficiency and economy with
other interests, including those of state employees.†(California
State Employees’ Assn. v. State
of California, supra, at
p. 846.) In Department of Transportation v. Chavez (1992)
7 Cal.App.4th 407 (Chavez), this
court held that where personal service contracts for maintenance of highway
rest stops were executed 20 years after the authorizing statute was
enacted, and a designated state agency used state employees for most of that
work during those intervening years, the Board could properly decide that the
work eventually contracted out did not relate to or stem from a new state
function within the meaning of section 19130. (Chavez,
supra, at pp. 409-411, 416.)
Thus, whether
services are a “new state function†depends not on whether, in theory or in
fact, they could be performed by
civil service employees, but rather whether they are, at the time of the contracts, already being performed by civil
service employees.
Moreover,
the “new state function†test should not be interpreted too narrowly. In California
Transportation Ventures, the court addressed whether contracting out
construction of state toll roads was permissible as a “new state
function.†(California Transportation Ventures, supra, 13 Cal.App.4th at pp. 592-593.) The program gave private developers exclusive
leases during which the developers would operate the facilities and apply
collected tolls to payment of their capital outlay, costs, and a reasonable rate
of return on investment. After the lease
term, the facility would revert to the state.
(Id. at p. 590.) Although the court agreed with the state
employees that the “design and construction of roads†was not a new state
function as a general matter, the court cautioned that the state employees took
“too literal an approach†in asserting the demonstration projects were not a
new state function. (
projects lay in the privatization of not only their financing (no state funds
would be used to defray construction costs), but also their design,
construction, and operation. (
The bar on private contracting of state work should not be interpreted
so as to “discourage [such] experimentation,†because “[t]he constitutional
policy of a merit employment system ‘does not prohibit legislative
experimentation in new forms to fit new functions.†(Ibid.)
In
contrast, a “ ‘ “new technique’ ’ †for performing an
existing state function does not constitute a “ ‘ “new state
function.†’ †(
p. 571.) In Dept. of Transportation, the Supreme Court held that legislation
authorizing Caltrans to use private contractors on state highway projects to
ensure timely retrofitting for seismic safety and ensure timely project
delivery did not involve a “new state function.†(Id.
at pp. 552, 569, 571.) Caltrans had
always been responsible for project development of state highway projects; the
new legislation did not change that but simply expanded Caltrans’s power to
contract with private entities to perform that work. (Id.
at p. 571.) The Supreme Court
rejected Caltrans’s argument that an “ ‘ “enriched†’ â€
blend of private contracting to meet responsibilities historically discharged
by Caltrans employees created a “ ‘ “new state
function.†’ †(
In discussing the decisional law, the Supreme Court said of
the legislation there authorized Caltrans to contract with private development
firms to construct and operate tollways under state lease, on an experimental
basis, to secure needed transportation unobtainable through public financing
arrangements. (Dept. of Transportation,
supra, 15 Cal.4th at p. 550.)
Although the design and construction of roads were neither new functions
nor ones that state workers could not satisfactorily perform, the privatization
program in the California Transportation
Ventures case was an experimental one, and no state funds would be used to
defray construction costs, and under these circumstances, considerations of
efficiency and economy permitted an exception to the private contracting
restriction. (Dept. of Transportation,
supra, 15 Cal.4th at p. 550.)
In
upon by the Board in this case, the Board disallowed contracts CDF entered into
with private medical providers to perform initial and periodic medical
examinations of firefighters who sometimes must wear respirators while working. (CDF,
supra, PSC No. 01-04 at
p. 1.) CDF argued the medical
examinations were a new state function because they were being conducted in
accordance with new regulations promulgated by California’s Division of
Occupational Safety and Health (Cal-OHSA); CDF had not previously performed medical
evaluations on all its respirator users; CDF nurse practitioners had never
performed this type of medical evaluation for respirator users; before the
regulations, CDF employees could be employed for years without medical
evaluation; and the nature and frequency of the newly mandated medical
evaluations constituted a significant change in philosophy and practice
compared to CDF’s past procedures. (
at pp. 4-5.) The Board’s entire
analysis of “new state function†stated:
“The documents submitted by both CDF and CSEA [employees’ association]
indicate, however, that CDF has historically performed medical evaluations of
employees when they are first appointed as limited term fire apparatus
engineers, when they turn 40, and when they turn 55. In addition, the duties listed in the class
specification for Nurse Practitioners call for them to conduct physical
examinations. Thus, from the information
CDF has provided, it appears that, under the new Cal-OSHA regulations, CDF was
not required to perform a new state function, but, instead, was compelled to
expand upon an existing state function.
The expansion of an already existing state function does not constitute
a new state function under the first condition of . . .
§ 19130(b)(2).†(
supra, at p. 5.) The Board
cited Dept. of Transportation,
page 571. (CDF, supra, at p. 5,
fn. 5.)
In
state function†test was vague, and a fair reading suggests the Board made its
determination because the nurse practitioners were capable of performing the so-called “expanded†services, not that
they were actually performing those functions.
We agree with the trial court that the CDF analysis, at heart, applied the “nature of the services†test
rather than the “new state function†test.
Therefore, CDF does not
support the Board’s decision in this case.
AFSCME
argues the trial court, in attempting to distinguish CDF, stated two inconsistent principles: (1) that a
contract may embrace a new state function even if the tasks are or can be
performed by existing civil service employees, and (2) that expansion of
an existing state function is not a new state function. AFSCME argues the “gap†in services identified
by the court is merely an expansion of existing services outside of normal
business hours, and merely adding services after business hours does not
constitute a “new state function.â€
AFSCME argues that focusing only on a chronological gap in services for
the “new state function†test, without regard to the “nature of the servicesâ€
provided by civil service employees, precludes the possibility that the gap can
-- and must, under the civil service mandate -- be an expansion of the agency’s
existing functions. Presumably, AFSCME
would have the State hire more civil service employees, or pay overtime to
existing civil service employees, to staff an after-hours POC.
However, no
supporting authority is cited. AFSCME
cites Dept. of Transportation. As indicated, ante, the Supreme Court there held that using private contractors
on state highway projects to ensure timely retrofitting for seismic safety and
ensure timely project delivery did not involve a “new state function,†because
Caltrans had always been responsible for project development of state highway
projects, and the new legislation did not change that but simply expanded
Caltrans’s power to contract with private entities to perform that work. (Id.
at pp. 552, 569, 571.) However, the
work in that case was work already being done by civil service employees, and
no facts supported a finding that civil service staff would be unable
adequately and completely to perform the work.
(Ibid.) Here, in contrast, the evidence showed POC
staff do not and would not perform any work after business hours.
AFSCME
suggests affirmance of the trial court’s judgment would constitute a ruling
that “displacement†of civil service for purposes of the “new state functionâ€
test occurs only where state workers are actually fired or laid off. We disagree.
Indeed, this court concluded the “new state function†test did not apply
in Chavez, where the existing
employees who had maintained the highway rest stops had not been laid off, but
had been reassigned to other work. (Chavez,
supra, 7 Cal.App.4th at
pp. 410-411, 416.)
Here, as in
Williams, “the state civil service suffers no displacement and the underlying
constitutional policy is not offended when a new state activity is conducted by
contract with a separate public or private entity.†(Williams,
We reject AFSCME’s contention that the trial court applied an improper
legal standard for “new state function.â€
Substantial Evidence
AFSCME
argues substantial evidence supports the Board’s finding that the contracted
services did not comprise a new state function, and the trial court improperly
reweighed the evidence before the Board.
We disagree.
As
indicated, the substantial evidence
standard in State Personnel Board cases requires that all evidence be considered, including that which fairly detracts
from the evidence supporting the Board’s decision. (California
Youth Authority, supra,
104 Cal.App.4th at pp. 584-586.)
AFSCME’s reliance on cases that employ a substantial evidence test in
other contexts is misplaced.
The
evidence showed that the private contractors provide services that fill a “gapâ€
in services performed by civil service employees in the counties covered by the
private contracts. They provide 24/7
care, including inpatient services; vocational training; housing referrals;
parolee transportation; and administrative support, office space, and necessary
equipment. Without the contracted
services, there is a gap in service between POC outpatient services and a 5150
hold. Before the contracts, the counties
had to look to local community agencies to try to put together -- piecemeal --
inpatient counseling, transitional services, critical care beds, and overnight
crisis counseling/care -- services not provided by POC. Some of the services under the contracts
which fill the gap between POC and a 5150 hold are transitional housing, acute
case management, and daily meetings with a counselor if necessary. POC workers are tied to the business hours of
the parole units, Monday through Friday, excluding nights, weekends and
holidays. POC workers do not provide a
24-hour call center or 24/7 access to a mental health professional, housing or
the other listed services, as do the private contractors. POC has no specific funding for housing;
parole agents merely have “cash assistance†available to assist with
transitional housing.
We have
considered all the evidence, including the evidence indicating an overlap of
services during POC’s regular business hours.
However, even indulging presumptions in favor of the Board’s decision,
there is no substantial evidence that civil services employees perform the
services that constitute the identified “gap.â€
AFSCME
argues there is such evidence, in that parolees have 24-hour access to their
parole agent and parolees know how to call other crisis hotlines or go to a
hospital. AFSCME argues Telecare’s 24/7
crisis care is, according to its proposal, just an on-call staff person with a
cell phone, to ensure evening and weekend coverage. However, even that is something not done by
POC staff. Although AFSCME questions
whether the person who carries the phone has adequate training, Telecare also
promised to have an administrator and program psychiatrist available for
after-hours consultation on an as-needed basis.
AFSCME argues “the only feature arguably distinguishing†the private
contractors’ activities from POC’s is that the private contractors “have
assumed the role of an after-hours crisis hotline (for parolees who already
have 24-hour access to a parole agent and other crisis hotlines).†Thus, AFSCME acknowledges that the private
contractors provide something not provided by POC social workers or
psychologists.
AFSCME
argues there is no evidence of what “in[]patient†care is being provided by the
private contractors. AFSCME says it
“does not dispute that Telecare or other private contractors may be capable of
providing in[]patient services to parolees,†but this does not establish that
their inpatient services, whether provided directly or by subcontract, is
distinct from POC’s activities. AFSCME
argues the private contractors may merely be subcontracting for inpatient
services in a manner already performed by POC staff. AFSCME points to the oral statements of POC
staff at the Board hearing, that the private contractors were doing the same
kinds of things POC staff did, “hookups with board and care,†etc. However, at most, this merely indicates a
potential overlap during POC business hours.
It says nothing about the gap filled by the private contractors for
services not performed by POC staff.
AFSCME says
the POC and private contractors work with the same population of parolees. However, the cited evidence is an oral
statement by POC psychologist Debra Webb at the Board hearing. She said some parolees were unhappy with one
of the private contractors and wanted to come back to POC. However, the Board chair agreed with CDCR
counsel that quality of care by the private contractor was not at issue in the
administrative appeal.
name="_ftnref17" title="">[17] We agree as well.
We conclude
the evidence is insufficient to support the Board’s decision.
Remand
AFSCME
argues that, if the trial court was correct that the Board failed to apply the
correct legal standard and make findings for the “new state function†test,
then we should remand to the Board to correct those defects. We disagree.
Code of
Civil Procedure section 1094.5 implicitly requires that administrative
agencies set forth findings “to bridge the analytic gap between the raw
evidence and ultimate decision or order.â€
(Topanga Assn. for a Scenic
Community v. County of Los Angeles (1974) 11 Cal.3d 506,
515.) When an administrative agency’s
findings are not adequate in that regard, remand is an appropriate remedy so
that the agency may make the proper findings.
(Glendale Memorial
Hospital & Health Center v. State Dept. of Mental Health
(2001) 91 Cal.App.4th 129, 140.)
However,
administrative agency findings need not be stated with the formality
and precision required in judicial proceedings, and remand is not
appropriate if the court determines that necessary findings reasonably may be
implied. (North Gualala Water Co. v. State Water Resources Control Bd.
(2006) 139 Cal.App.4th 1577, 1603.)
Here, we
conclude (as did the trial court) that remand is not required, because
the Board’s ultimate decision -- that CDCR failed to prove a “new state
function†-- necessarily implied the underlying finding that the contracted
services duplicate and displace existing state functions.
The
judgment is affirmed. CDCR shall recover
its costs on appeal. (Cal. Rules of
Court, rule 8.278(a).)
MURRAY , J.
We concur:
BLEASE , Acting P. J.
NICHOLSON , J.
name="_ftn1" title="">[1] Penal Code section 3073 provides: “[CDCR] is hereby authorized to obtain day
treatment, and to contract for crisis
care services, for parolees with mental health problems. Day treatment and crisis care services should be designed to reduce parolee recidivism
and the chances that a parolee will return to prison. The department shall work with counties to
obtain day treatment and crisis care services for parolees with the goal of
extending the services upon completion of the offender’s period of parole, if
needed.†(Italics added.) (Stats. 2007, ch. 7, § 12
(sometimes referred to herein as AB 900).)
name="_ftn2" title="">[2] California Constitution, article VII,
section 1 provides: “(a) The
civil service includes every officer and employee of the State except as otherwise
provided in this Constitution. [¶] (b) In the civil service permanent
appointment and promotion shall be made under a general system based on merit
ascertained by competitive examination.â€
The State Personnel Board is a constitutional agency charged with
enforcing the civil service statutes.
(Cal. Const., art. VII, § 3.)
