1 2 3 4 5 6 7 8 9 10 11 12 1 3 14 15 16 17 18 19 20 21 22 23 24

KAMALA D . HARRIS

Attomey General of Califomia

PETER A. KRAUSE

E O
MR - 5 2 1 A 02
By_ L. Gutierrez Deputy Clerk

Supervising Deputy Attomey General Ross C. MOODY Deputy Attomey General State Bar No. 142541 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102-7004 Telephone: (415)703-1376 Fax: (415)703-1234 E-mail: Ross.Moody(^doj.ca.gov Attorneys for Defendant State Controller John Chiang

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SACRAMENTO

DARRELL STEINBERG, in his capacity as President Pro Tempore ofthe California Senate; JOHN A. PEREZ, in his capacity as Speaker of the California Assembly,

Case No. 34-2012-00117584

M E M O R A M ) U M OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT JOHN CHIANG'S Plaintiffs, MOTION FOR JUDGMENT ON THE PLEADINGS

Date: April 10,2012 Time: 2:00 p.m. Dept: 53 JOHN CHIANG, in his capacity as Califomia State Controller; DOES I-X, Judge: David I . Brown Trial Date: N/A Defendants. Action Filed: January 24,2012 Reservation No: 1675300

25 26 27 28

1 2 3 4 5 6 7 8 9 10 11 12 III. B. C. Introduction The Parties

TABLE OF CONTENTS Page 1 2 3 5 Applicable principles Plaintiffs' request for declaratory relief is not justiciable A. Plaintiffs have failed to identify a concrete controversy warranting declaratory relief Plaintiffs also fail to identify any iniminent or significant hardship in delaying review Declaratory relief is not intended to redress past harms 5 6 7 11 12 13 13 5 17 19 21 23

The Requirements of Propositions 58 and 25 Argument I. II.

The Controller did not exceed his authority by withholding legislative salaries and expenses. A. B. The provisions of Propositions 58 and 25 support the Controller's actions The Controller had a legitimate basis for withholding legislative p a y ; 1 The lack of a current appropriation was an independent basis for withholding legislative pay The Controller did not violate principles of separation of powers The Controller was entitled to consider the Govemor's findings on the budget act

14 C. 15 16 17 Jg D. E. Conclusion

19 20 21 22 23 24 25 26 27 28
Memorandum Of Points And Authorities In Support Of Defendant John Chiang's Motion For Judgment On The Pleadings (34-2012-00117584)

TABLE OF AUTHORITIES Page

CASES

Altaville Drug Store v. Employment Development Department (1988) 44 Cal.3d231 Angelucci v. Century Supper Club (2007)41 Cal.4th 160 Boblitt V. Boblitt (2010) 190 Cal.App.4th 603 9 10 11 1213 14 15 1^ 17 2g 19 20 21 22 23 24 25 26 2^ 28 Hassanally v. Firestone ' (1996) 51 Cal.App.4th 1241 Ingram v. Flippo (1999) 74 Cal.App.4th 1280 Farm Sanctuary, Inc. v. Department of Food & Agriculture (1998) 63 Cal.App.4th 495 Flournoy V. Priest (1971)5Cal.3d350..... Gilb V. Chiang (2010) 186 Cal.App.4th 444 '. ' City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43 County of San Diego v. San Diego NORML (2008) 165 Cal.App.4th 798
I

6 5

California Highway Com, v. Riley (1923) 192 Cal. 97 California Water & Tel. Co. v. Los Angeles County (1967) 253 Cal.App.2dl6 Canova v. Trustees of fmperial frrigation District Employee Pension Plan (2007) 150 Cal.App.4th 1487 l

18

11 12

7, 11 6 12

Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877

7 2

; 2, 16, 17

21 19

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Shaw V. People ex rel. Chiang (2009) 175 Cal.App.4th 577 Lexin v. Superior Court (2010) 47 Cal.4th 1050 Lungren v. Davis (1996) 234 Cal.App.3d 806 Madden v. Riley (1942) 53 Cal.App.2d 814 Marshall v. Dunn (1886) 69 Cal. 223

TABLE OF AUTHORITIES (continued) Page 4

12, 17

18, 20

17

Mateel Environmental Justice Foundation v. Edmund A. Gray Co. (2003) 115 Cal.App.4th8 Natural Res. Def. Council v. Abraham (9th Cir. 2004) 388 F.3d 701 Nelson v. Superior Court (2006) 144 Cal.App.4th 689 Pacific Legal Foundation v. California Coastal Com 'n (1982) 33 Cal.3dI58 People V. Wallace (2004) 120 Cal.App.4th 867 Reddell v. California Coastal Com 'n (2009) 180 Cal.App.4th 956 Sanctity of Human Life Network v. California Highway Patrol (2003) 105 Cal.App.4th 858, 129 Cal.Rptr.2d 708 Schabarwn v. California Legislature (1998) 60 Cal.App.4th 1205 Selby Realty Co. v. City of San Buenaventura (1973) 10CaL3d 110 ' : '. :.: '. '.

8 11 5

6, 7,8 10 4 9 2

; ;

6 3

St. John's Well Child and Family Center v. Schwarzenegger (2010) 50Cal.4th 960 ,

3,4, 10

111

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Code of Civil Procedure 1060 1061 1085 :

T A B L E OF AUTHORITIES (continued) Page State Compensation Insurance Fund v. Riley (1937)9Cal.2d 126 Stockburger v. Riley (1937)21 Cal.App.2d 165 Stratton v. Green (1872) 45 CaL 149 ; 16

16

17

Teachers' Retirement Bd. v. Genest (2007) 154 Cal.App.4th.1012 , Tirapelle v. Davis (1993) 20 Cal.App.4th 1317 Treu V. Kirkwood (1954) 42 Cal.2d 602 Veterans of Foreign Wars v. State of California (1974) 36 Cal.App.3d 688 Warth V. Seldin (1975) 422 U.S. 490

7, 9

16

16 , 20

7 16 9, 17, 18

Westly V. California Public Employees' Retirement System Bd. of Administration (2003) 105 Cal.App.4th 1095 White V. Davis (2003) 30 Cal.4th 528 Wilson & Wilson v. City Council of Redwood City (2011)191 Cal.App.4th 1559 Yes on 25, Citizens For An On-Time Budget v.-Superior Court (2010) 189 Cal.App.4th 1445
STATUTES

'.

Assembly Bill 98

10

:
IV

6 6 12

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10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Proposition 25 Proposition 58 Government Code 12405 12410 12410, etseq 12440 13144 68210

T A B L E OF AUTHORITIES (continued) Page ; , : 2 2,16, 18 2 16 16 ; 21 passim passim 9

Senate Bill 20 (2003 1st Ex. Sess.)

CONSTITUTIONAL PROVISIONS

Califomia Constitution article IV, 12 article IV, 12, subdivision (c)(3) article IV, .12, subdivision (g) article IV, 12, subdivision (h) article V, 11 article V I , 19 article X V I , 7
O T H E R AUTHORITIES

'. '. ,

passim 2 3,14, 20 3, 13,18 ; 2 21 2, 15

6 Witkm, Cal. Proc. 5th (2008) Proc. Without Trial, 190, p. 629 Ballot Pamp., 2010 General Election Supp. Ballot Pamp., 2004 Primary Election, p. 10 Supplemental Voter Information Guide, Primary Elec. (Mar. 2, 2004)

6 5,14 4, 14 3

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INTRODUCTION The President Pro Tempore of the Califomia Senate and the Speaker of the Califomia Assembly ("Plaintiffs") seek declaratory relief against State Controller John Chiang ("Controller") arisingfi:omhis refusal to issue pay warrants and per diem rehnbursements to Califomia legislators in June 2011 after he concluded that there was no legitimate basis for issuing those payments. Plaintiffs contend that the Controller "exceeded his authority under the Constitution and violated the separation of powers doctrine by injecting himself into the legislative budget-making process." (Complaint, ^ 32.) To the contrary, the Controller acted in accordance with his ordinary constitutional and statutory duties to confirm that necessary conditions are in place before a warrant may be issued. It has long been the law that no warrant shall issue without (1) an appropriation, and (2) an adequate basis for the Controller to issue payment. As of midnight on June 15, 2011, the new provisions of Proposition 25 requiring the Legislature's passage of a balanced budget in order to be paid, together with the absence of such a budget presented to the Govemor, meant there was no basis at that point for the Controller to issue payments for legislative salaries and expenses. For related reasons, there was no current appropriation for the payments in question. Because neither of the conditions required for payment by the Controller was satisfied with respect to legislative salaries and expenses, the validity of the Controller's action last summer is unassailable. Before even reaching the Controller's case on the merits, however, the controversy as pleaded by Plaintiffs is unripe and lacking sufficient factual underpinnings to be adjudicated by this Court. Because Plaintiffs have chosen not to challenge the Controller's June 2011 actions, and instead seek declaratory relief regarding a theoretical future budget act, they pray for an improper advisory opinion, not a proper declaratory judgment. Accordingly, whether on thresholdripenessgrounds or on the merits, the Controller respectfully requests that the Court grant this motion and dismiss the Complaint.

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THE PARTIES "The Controller is a state constitutional officer who is elected at the same time and places and for the same term as the Govemor." (GUb v. Chiang (2010) 186 Cal.App.4th 444, 464; Cal. Const., art. V, 11.) The Califomia Constitution provides that "[mjoney may be drawn from the Treasury only through an appropriation made by law and upon a Controller's duly drawn warrant." (Cal. Const., art. XVI, 7.) In Flournoy v. Priest (1971) 5 Cal.3d 350, 354, the Supreme Court characterized the constitutional requirement ofa "duly drawn warrant" as follows: "The obvious purpose of this requirement is to insure the Controller's concurrence in the expenditure of state fiinds." If the expenditure is "authorized and approved by the Controller," then this constitutional requirement is met. (Ibid.) The Controller's statutory jurisdiction, which encompasses and expands upon his constitutional duties, is set forth in articles 2 through 5 of title 2, division 3, part 2, chapter 5 of the Govemment Code ( 12410, et seq.).' These articles vest the Controller with the responsibility to audit and make payments from the state treasury and to operate a uniform payroll system for all branches of state govemment. The Controller is required to audit all claims against the state and all claims for the disbursement of any state money for their correctness, and to determine whether the law supports payment. ( 12410.) The Office of State Controller is a state department, and the Controller is the head of that department. ( 12405.) Plaintiffs are leaders of the California Senate and Assembly. "The enactment of a budget bill is a legislative fimction; it is both a right and a duty that is expressly placed upon the Legislature and tlie Govemor by our state Constitution." {Schabarumv. California Legislature (1998) 60 Cal.App.4th 1205, 1214; see Cal. Const., art. IV, 12.) "Altiiough tiie Cahfomia Legislature is required to pass a budget bill by June 15 each year (Cal. Const.-, art. IV, 12, subd. (c)(3)), timely passage has become the exception rather than the mle." {Gilb v. Chiang, supra, 186 Cal.App.4th at p. 452.) "[Ejven in matters involving the state budget, the courts have the responsibility for determining the constitutionality of acts of the Legislature, and in doing so ' All fiarther statutory citations are to the Govemment Code unless otherwise stated.
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to give effect to the will of the electorate which is, of course, paramount." {Shaw v. People ex rel. Chiang (2009) 175 Cal.App.4th 577, 596 [intemal quotation marks and citation omiti:ed].) THE REQUIREMENTS OF PROPOSITIONS 58 AND 25 In recent years, the requirements for passing the armual state budget have been significantly changed by two initiatives which amended the Constitution, Propositions 58 and 25. Proposition 58, "The Califomia Balanced Budget Act," was passed in March of 2004. The balanced budget requirement in Proposition 58, which is codified in article IV, section 12, subdivision (g) of the Constitution, expressly requires that the budget passed by the Legislature and sent to the Govemor for signature must be balanced. It provides that the "Legislature may not send to the Govemor for consideration, nor may the Govemor sign into law, a budget bill that would appropriate from the General Fund" an amount in excess of the projected revenues for the General Fund for thatfiscalyear. {Ibid.) It thus also barred the Govemor from signing into law a budget act if General Fund spending exceeded projected revenues. {Ibid.) But in addition to passing a balanced budget, fhe Legislature was also required to follow up and make changes, to the budget to keep it in balance going forward. "Proposition 58 requires the Legislature to enact a balanced budget and if circumstances change after they pass the budget, the Govemor is required to call them into special session fo make mid-year changes to the budget." {St. John's Well Child and Family Center v. Schwarzenegger (2010) 50 Cal.4th 960, 987, fn. 24, quoting with approval the Supplemental Voter Information Guide, Primary Elec. (Mar. 2, 2004) rebuttal to argument against Prop. 58, p. 15.) Proposition 25, the "On-Time Budget Act of 2010," was approved by voters in November of 2010. It amended article IV, section 12 of the Constitution in two significant ways. First, it reduced the legislative vote requirement to pass a budget from two-thirds to a simple majority. Second, it prohibited legislators from collecting any salary or certain reimbursements if the budget bill is not passed by the Legislature and submitted to the Govemor for signature by midnight on June 15. Under the relevant provisions, legislators are not to be paidfromJune 15 until tiie day the budget bill is passed and presented to the Govemor. (Cal. Const., art. IV, 12, subd. (h).) The forfeiture of legislative salaries passed in Proposition 25 and codified in article IV,
3

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section 12, subdivision (h) expressly provides that no legislator shall be paid during the period the budget bill is late, statmg that "in any year in which the budget bill is not passed by the Legislature by midnight on June 15, there shall be no appropriation.from the current budget or future budget to pay any salary" to members of the Legislature "until the day. the budget bill is presented to the Govemor." The "Purpose and Intent" section of Proposition 25 states, in relevant part: The People enact this measure to end budget delays by changing the legislative vote necessary to pass the budget from two-thirds to a majority vote and by requiring Legislators to forfeit their pay if the Legislature fails to pass the budget on time. {Yes on 25, Citizens For An On-Time Budget v. Superior Court (2010) 189 Cal.App.4tii 1445, . 1450, emphasis supplied.)

JJ j2 12

The provisions of subdivisions (g) (balanced budget requirement) and (h) (forfeiture of legislative salary for late budget) of article IV, section 12 must be read together as two parts of one section in the Constitution addressing the budget bill; that is, as provisions in pari materia. {SQQ Altaville Drugstore v. Employment Development Department (1988) 44 Cal.3d 231, 236, fin. 4 [in pari materia means "'[o]f the same matter'" or "'on the same subject,'" quoting Black's Law Diet. (5th ed. 1981) p. 1004].) "It is a basic canon of statutory constmction that statutes in pari materia should be constmed together so that all parts of the statutory scheme are given

Jg IP 2 Q 21 22 22 24 25 26 27 28

effect." {Lexin v. Superior Court (2010) 47 Cal.4th 1050,1090-91.) Read togetiier, these constitutional provisions require the Legislature to present a balanced budget bill to the Govemor on time or else forfeit salary until they do. Otherwise, the Legislature could avoid forfeiture of its pay simply by improperly disregarding the prohibition against passing an unbalanced budget bill. The titie and summary of Proposition 58 explained that it "[rjequires enactment of a balanced budget where General Fund expenditures do not exceed estimated General Fund revenues." (Supp. Ballot Pamp., 2004 Primary Election, p. 10, Exhibit A to Defendant's Request for Judicial Notice herein.)^ And Proposition 25's ballot titie and summary stated that "if the 2 In considering a motion for judgment on the pleadings, a court may consider both tiie pleadings and matters which are properly the subject of judicial notice. {Reddell v. California Coastal Com 'n (2009) 180 Cal.App.4tii 956, 971.) The Controller is concurrentiyfilinga request for judicial notice of the relevant ballot pamphlets cited herein. (See St. John's Well Child and ' (continued...)
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Legislature fails to pass a budget bill by June 15, all members of the Legislature will permanently forfeit any reimbursement for salary and expenses for every day until the day the Legislature passes a budget bill." (Ballot Pamp., 2010 General Election, p. 52, Exhibit B to Defendant's Request for Judicial Notice herein.) Thus, under the plain language of the propositions, as well as their legislative history, a budget bill must be balanced in order for legislators to continue to receive pay. (See also Complaint Tf^ 5, 33, Prayer for Relief, ^ 1 [acknowledging legislators are not entitied to salary and reimbursements in event of passage of unbalanced budget, aside from disagreement regarding the Controller's role in determining whether to issue such payments].) ARGUMENT Plaintiffs invite this Court to declare the respective rights and obligations of the Controller and California legislators upon a blank factual record. Rather than tethering their claim to a specific budget act, subject to evaluation. Plaintiffs have asked the Court to opine in the absfract. The Court should decline Plaintiffs' invitation to adjudicate hypothetical budget scenarios, as this would amount to issuing an advisory opinion, and not a proper declaratory judgment. Should the Court find some path to the merits, a declaratory judgment should be entered in favor of the Controller. His actions in withholding legislative pay were in keeping with his constitutional role, and were in no manner improper.
I. APPLICABLE PRINCIPLES

A motion for judgment on the pleadings "performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.". {Boblitt v. Boblitt (2010) 190 Cal.App.4th 603, 606, fn. 2, mtemal quotation marks and citation omitted.) Accordingly, this Court should "accept as true the complaint's factual allegations and give them a liberal constmction." {Nelson v. Superior Court (2006) 144 Cal.App.4th 689, 692.) In addition to the four comers of the complaint, the record on a motion for judgment on the pleadings can be "supplemented by any matter of which the trial court takes (...continued) Family Center v. Schwarzenegger, supra, 50 Cal.4th at p. 967, fn. 5 [ballot materials are proper subj ect of request for j udicial notice].)
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5

judicial notice." {Angelucci v. Century Supper Club (2007) 41 Cal.4tii 160, 166.) "A motion for judgment on the pleadings may be used in an action for declaratory relief to obtain a declaratory judgment on the merits in favor ofthe defendant, rather than dismissal ofthe plaintiffs action." (6 Witicin, Cal. Proc. (5th ed. 2008) Proc. Witiiout Trial, 190, p. 629.)
II. PLAINTIFFS' REQUEST F O R DECLARATORY R E L I E F I S NOT JUSTICIABLE

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

A declaratory judgment action may be brought under Code of Civil Procedure section 1060 when there is an "actual controversy relating to the legal rights and duties of the respective parties." (Code Civ. Proc, 1060.) But courts have discretion to refuse to entertain claims for declaratory relief when its declaration or determination is not necessary or proper at the time under the circumstances. (Code Civ. Proc, 1061.) At present, there is no live confroversy for this Court to adjudicate. Plaintiffs' contentions are based upon what may happen in the future, or may never happen at all. At bottom, Plaintiffs seek an unproper advisory opinion from this Court. Section 1060's "actual confroversy" requirement "does not embrace controversies that are ' 'conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.'" {Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 15 82.) In other words, an action for declaratory relief must be based on a confroversy with known parameters, and the "judgment must decree, not suggest, what the parties may or may not do." {Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110, 117.) "Courts will decline to resolve lawsuits that do not present a justiciable controversy, and justiciability 'involves the intertwined criteria of ripeness and standing.'" {County of San Diego v. San Diego NORML (2008) 165 Cal.App.4tii 798, 813.) The doctrine ofripeness"is primarily bottomed on the recognition that judicial decisionmaking is best conducted in the context of an actual set of facts so that the issues will be

24 framed with sufficient definiteness to enable the court to make a decree fmally disposing of the 25 26 27 28 confroversy." {Pacific Legal Foundation v. California Coastal Com 'n. (1982) 33 Cal.3d 158, 170.) Unripe cases are those in which parties seek a judicial declaration on a question of law, though no live dispute or controversy exists requiring the declaration for its determination. These "prudential considerations defmuig and limiting the role of the courts . . . are threshold
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determinants of the propriety of judicial intervention." {Worth v. Seldin (1975) 422 U.S. 490, 517-518.) To determine if a confroversy is ripe, courts employ a two-pronged test: (1) ^yhether the dispute is sufficiently concrete that declaratory relief is appropriate; and (2) whether v^thholdmg judicial consideration will result in hardship to tiie parties. {Pacific Legal Foundation, supra, 33 Cal.3d at pp. 171-173; City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 59.) "Under the fust prong, the courts will decline to adjudicate a dispute if 'the abstract posture of [tiie] proceeding makes it difficult to evaluate . . . the issues,' if the court is asked to speculate on the resolution of hypothetical situations, or if the case presents a'contrived inquiry.' Underthe second prong, the courts will not intervene merely to settle a difference of opinion; there must be an imminent and significant hardship inherent in further delay." {Farm Sanctuary, Inc. v. Department of Food & Agriculture (1998) 63 Cal.App.4tii 495, 502, citations omitted.) "hi a declaratory relief action, the question of whether a controversy is ripe for judicial determination is a matter v/ithin the discretion of the trial court, and its decision will not be disturbed on appeal absent an abuse df that discretion." {Teachers' Retirement Bd. v. Genest (2007) 154 Cal.App.4th 1012,1040.) As is explained below. Plaintiffs' claim here fails both prongs of the ripeness test. A. Plaintiffs Have Failed to Identify a Concrete Controversy Warranting Declaratory Relief

In their complaint. Plaintiffs purport to identify a number of issues on which they and the Controller allegedly disagree. (Complaint, ^ 33.) But even assuming the truth of these allegations, as the Court must on this motion, the mere fact the parties might constme the relevant constitutional provisions differently does not render the issues appropriate for immediate judicial resolution under the first prong of the ripeness test. (See Pacific Legal Found, v. California Coastal C o m s u p r a , 33 Cal.3d at p. 172 ["It isfruethat the parties' interests are adverse, and the issues have been thoroughly addressed in the voluminous briefs bn file[, but] . . . the absfract posture of this proceeding makes it difficult to evaluate [] the issues"].) Thus, adverse views between the parties are not enough; a matter where the parties are adverse is yet unripe if the
7

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posture of the case may require a court to speculate about unpredictable future.events in order to evaluate the parties' claims. (See ibid.) Here, a declaration of the legal rights and duties ofthe parties, as they relate to the Confrpller's authority to withhold legislative pay when he concludes that a budget bill is not balanced, would require the Court to speculate about unknown hypothetical future actions by the Legislature, the Govemor, and the Controller. Indeed, such a declaration would contemplate the Court cataloguing resolutions in perhaps an infinite number of budget scenarios. This case, as pleaded, presents at best a theoretical difference of opinion. Plaintiffs expressly decline to seek a ruling on the Confroller's actual actions in 2011 (see Section II.C, infi-a), and they do not allege that pending legislation is at imminent risk of being improperly handled. Instead, they refer to a generic and hj^othetical future budget act, as underscored in their prayer for a declaration that: The Legislature complies with article rv, section 12, subdivision (g), of the Constitution when it sends the Govemor a budget bill that, on its face, proposes General Fund appropriations that, when combined with all previous General Fund appropriations made for that fiscal year as of the date of the budget bill's passage and any General Fund moneys transferred to the Budget Stabilization Account for that fiscal year, do not exceed the Legislature's estimate of General Fund revenues for that fiscal year as of the date of the budget bill's passage. (Complaint, Prayer for Relief, 11 - a., emphasis added.) Because Plaintiffs present no concrete set of facts against which to evaluate the propriety of the Controller's action or inaction on a specific budget bill, they give the Court no basis for determining whether the Confroller would be justified in the future in withholding legislative pay consistent with the voter's intent in Propositions 25 and 58. (See Mateel Environmental Justice Foundation v. Edmund A. Gray Co. (2003) 115 Cal.App.4th 8, 20,fin.6 ["In an emerging area of the law, we do well to tread carefully and exercise judicial restraint, deciding novel issues only when the circumstances require"].) As pleaded. Plaintiffs' claims are wholly speculative and seek nothing more than an advisory opinion conceming the scope of the Controller's authority. {Pacific Legal Foundation v. California Coastal Com 'n., supra, 33 Cal.3d at p. 173 [courts vfill "not be drawn into disputes which depend for their immediacy on speculative future events"].)

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A mere belief that a state officer might overreach or interpret a law erroneously does not give rise to a ripe confroversy, as confinned in an opinion authored by one of Plaintiffs' own attomeys. In Teachers' Retirement Board v. Genest, supra, 154 Cal.App.4th 1012, the Teachers Retirement Board (TRB), as manager of the California State Teachers'. Retirement System (CalSTRS), sought declaratory relief against the Director, of the Department of Finance to fhe effect that Senate Bill 20 (2003 1st Ex. Sess.) was unconstitutional because it interfered with TRB's plenary authority to administer the assets of CalSTRS. {Id. at p. 1020.) Writing for the court, Justice Scotland found the claim to be umipe: As for TRB's request that we issue a judicial declaration defining (1) the contours of the TRB's plenary authority to administer the CalSTRS system, and (2) the extent to which the Legislature may legislate in this area after voter approval of Proposition 162, this is notiiing more than a request for an advisory opinion. TRB is concemed that the Legislature wdll continue fo"put its hands back in 'the till' of retired public employees' monies" and continue to enact legislation that interferes with TRB's administration of CalSTRS. But "[cjourts siniiply may not render advisory opinions on controversies which the parties fear wUl arise, but which do not presently exist." {City of Santa Monica v. Stewart (2005) 126 Cal.App.4tii 43, 78, 24 Cal.Rptr.3d 72; see also Sanctity of Human Life Network v. California Highway Patrol (2003) 105 Cal.App.4tii 858, 872, 129 Cal.Rpfr.2d 708.) "This policy is driven largely by a recognition that courts are unable properly to adjudicate issues when only hypothetical facts are involved." {City of Santa Monica v. Stewart, supra, 126 Cal.App.4tii at p. 70, 24 Cal.Rptr.3d 72, fh. omitted.) [ f | Accordingly, we decline to issue an advisory opinion to forestall hypothetical events that may never occur. {Id. at pp. 1043-1044.) The facts of the present case are analogous. The Complaint does not seek a declaration about a past budget bill or even a pending budget bill; it seeks a declaration to forestall the Confroller's anticipated actions on a budget bill that may (or may not) be drafted and passed in the future. But there is no reason to assume the Legislature would repeat any version of eventsfroma year ago, triggering any responsefromthe Confroller at all. Where the controversy involves too many future variables for the Court to "make a declaration" that "will be applicable under all scenarios," plaintiffs are seeking an unauthorized advisory opinion, which should not be offered. {Sanctity of Human Life Network v. California Highway Patrol, supra, 105 Cal.App.4th at p. 873.) The Supreme Court has expressly warned that deciding who to pay, and when to pay them "often involves complex legal issues." {White V. Davis (2003) 30 Cal.4th 528, 562.) Hence, decidmg in a vacuum whetiier a futtire

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budget act might be "balanced" is an impossibility, and trying in the absfract to chart an overarching rule for limiting the Controller's role would be folly. A budget bill is not a simple document lending itself to cursory review. As the Complainf concedes, although the budget is referred to by the shorthand of a "budget bill," it is in fact a series of interrelated bills comprising hundreds of pages. (Complaint, ^ 14 and fn. 2.) For example, the "final revised budget package" for fiscal year 2009-10 "consisted of 547 pages, set forth in 583 sections." {St. John's Well Child and Family Center v. Schwarzenegger, supra, 50 Cal.4tii at p. 968; see also People v. Wallace (2004) 120 Cal.App.4th 867, 873 [2003-2004 Budget Act required 24 trailer bills to be implemented].) The budget bill cited and discussed by Plaintiffs, AB 98. (see Complaint, ^ 25), was a substantial document, consisting of a total of 528 pages. (A copy of AB 98 (2011) is available online at vmw.Ieginfo.ca.gov/pub/1112/bill/asm/ab_0051-0100/ab_98_bill_20110614_amended_sen_v96.pdf) The Court should decline Plaintiffs' invitation to opine as to possible application of constitutional provisions to unknown future 500-plus page documents with no specific factual context to guide it. For an illusfration of the impmdence of attempting to make broad and sweeping declarations ofrightson an inadequate factual record, one need look no further than the facts alleged here in the Complaint as to last year.'s budget bill. In seeking a broad declaration regarding the Controller's evaluation of a hypothetical future budget bill. Plaintiffs suggest that merely making a mathematical comparison of a budget bill's bottom-line totals is sufficient to reveal whether it satisfies the requirements of Propositions 58 and 25. (See Complaint, 33.) But to stop there would be to stop too early, at the risk of ignoring key details and facts particular to any given budgetflying behind the bottom-line totals. For example, on last year's budget no less an authority than the Govemor stated, in his veto message: "[The budget bill] contains legally questionable maneuvers . . . and unrealistic savings. . . . [l]t is not financeable and therefore will not allow us to meet our obligations as they occur." (Govemor's Veto Message, June 16, 2011, Exhibit D to The Controller's Request for Judicial Notice herein.) A court might well fmd this additional fact significant.in its analysis, but under Plaintiffs' prescription the
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Governor's declarationand any other shortcomings in the bottom-luie totals particular to any given budgetwould never be examined or considered. A court should only proceed on an adequate factual record before issuing a declaration of rights and duties on the scale ofthe order sought here. The Court should grant the Controller judgment of dismissal of the Complaint as unripe, so that Plaintiffs may bring their dispute, if one arises, before the Court on a proper and full factual record. B. Plaintiffs Also Fail to Identify any Imminent or Significant Hardship in Delaying Review

Tuming to the second prong of the ripeness test, the complaint fails to identify or allege "an imminent and significant hardship inherent in" delaying declaratory relief {City of Santa Moriica V. Stewart, supra, 126 Cal.App.4th at p. 64.) Hardship in this context "does not mean just anjthing that makes life harder; it means hardship of a legal kind, or something that imposes a significant practical harm upon the plaintiff." {Natural Res. Def. Council v. Abraham (9th Cir. 2004) 388 F.3d 701, 706.) The mere fact that Plaintiffs and the Confroller might disagree at some level over the interpretation of subdivisions (g) and (h) of article IV, section 12 does not create a hardship for plaintiffs. For declaratory relief, the party must show it either has suffered or is about to suffer an injury of "sufficient magnitude reasonably to assure that all of the relevant facts and issues will be adequately presented." {California Water & Tel. Co. v. Los Angeles County (1967) 253 Cal.App.2d 16, 23; see also City of Santa Monica v. Stewart, supra, 126 Cal.App.4th at p. 64 [dismissing action for declaratory relief regarding the constitutionality of an initiative as unripe because '"courts will not intervene merely to settle a difference of opinion; there must be an iniminent and significant hardship inherent in fiirther delay'"].) Here, although Plaintiffs have articulated an absfract concem that the Confroller might again withhold legislative pay in a way they believe is ulfra vfres, at present they face no articulated hardship, much less one that is "imminent and significant." Importantiy, Plaintiffs expressly disclaim rettospective relief and "emphasize that this action does not request any relief with respect to the Controller's unauthorized withholding of legislators' salaries and expenses iti
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2011." (Complaint, ^5.) Plaintiffs never did seek, and are not now seeking, recovery for amounts indisputably not paid to legislators in 2011. And Plaintiffs and their legislator colleagues are indisputably receiving their salaries and reimbursements currentiy. In these circumstances, it would not make sense to suggest that Plaintiffs are suffering any hardship unless and until the 2012-2013 budget cycle unfolds again in a way such that the budget passed by June 15 is unbalanced. At this point, this case presentsat mosta difference of opinion, not a justiciable confroversy. If cfrcumstances ever again develop such that the Confroller withholds legislative pay in a manner that Plaintiffs believe is unlawful, they may pursue appropriate legal remedies at that time. (See discussion in Sections III.A.-B., zn/^a.) In the meantime, there is no hardship to Plaintiffs that would form a basis for departingfromthe ordinary rule of resolving disputes on a proper and fiill factual record, and the Court should dismiss the Complaint as unripe. C. Declaratory Relief Is Not Intended to Redress Past Harms

To the extent Plaintiffs are seeking a declaration relating to the Confroller's past actions, as they relate to thefiscalyear 2011-2012 budget, declaratory relief is the wrong vehicle. "Declaratory relief operates prospectively to declare futurerights,rather than to redress past wrongs." {Canova v. Trustees of Imperial Irrigation District Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497; Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 885.) Plamtiffs disclaun any refrospective relief, but they nonetheless appear to premise their action on allegations regairding the Confroller's brief refusal to pay legislators in 2011. (See Complaint, 23-29.) A declaratory judgment predicated on a

past controversy, of course, would be inconsonant with the forward-looking focus of declaratory relief. (Cf Code Civ. Proc, 1085; Lungreny. Davis (1996) 234 Cal.App.3d 806, 831 [issumg peremptory writ of mandate "directing respondent Controller to pay the compensation to which" petitioner was entitled].) Accordingly, the past confroversy does not provide a present basis for

26 freating Plaintiffs' action as justiciable. 27 28

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III. 2 THE CONTROLLER DID NOT EXCEED HIS AUTHORITY BY WITHHOLDING LEGISLATIVE SALARIES AND EXPENSES

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Even if the Court were to reach the merits of this dispute as applied to the events surrounding the FY 2011-2012 budget bill or otherwise, it is plain that the ControUer acted within his authority in 2011 by withholding legislative salaries and expenses prior to the passage of a budget bill that met constitutional requirements. Through Proposition 58 and Proposition 25, the voters have unequivocally expressed their will on two points: (1) the Legislature must pass a budget act that is balanced, and (2) if they do not pass that budget on time, legislators should not be paid during the period a budget is late. The Controller acted in accordance with the constitutional provisions added by these ballot measures, as well as in accordance with his clearly established duties regarding issuing pay warrants, when he withheld legislative pay in June of 2011. A. The Provisions of Propositions 58 and 25 Support the Controller's Actions

As relevant here. Proposition 25 denies lawmakers pay when they do not submit a budget bill on time, and Proposition 58 requires budget bills to be balanced. The collective effect ofthe two measures is that a budget bill must be balanced in order for legislators to continue to receive payAs described above. Proposition 25 amended article IV, section 12 of the Constitution to prohibit legislators from collecting any salary or certain reimbursements when the budget bill is not passed by the Legislature and submitted to the Govemor for signature by midnight on June 15 Under the relevant provisions, legislators are not to be paid from June 15 until the day the budget bill is passed and presented to the Govemor. (Cal. Const., art. IV, 12, subd. (h).) The forfeiture of legislative salaries approved in Proposition 25 and codified in article IV, section 12, subdivision (h) expressly provides that no legislator shall be paid during the period the budget bill is late: "in any year in which the budget bill is not passed by the Legislature by midnight on June 15, there shall be no appropriation from the current budget or fiiture budget to pay any salary" to members of Legislature "until the day the budget bill is presented to the Govemor." The
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expressed "Purpose and Intent" of Proposition 25 was "to end budget delays by changing the legislative vote necessary to pass the budget from two-thfrds to a majority vote and by requiring Legislators to forfeit their pay if the Legislature fails to pass the budget on time." (Ballot Pamp., 2010 General Election, p. 113, emphasis supplied. Exhibit B to Defendant's Request for Judicial Notice herein.) Proposition 58, passed in March of 2004, and codified in article IV, section 12, subdivision (g) of the Constitution, expressly requires that the budget sent to the Govemor for signature be balanced. The "Legislature may not send to the Govemor for consideration, nor may the Govemor sign into law, a budget bill that would appropriate from the General Fund" an amount in excess of the projected revenues for the General Fund for that fiscal year. It thus also barred the Govemor from signing into law a budget act i f General Fund spending exceeded projected revenues. {Ibid.) The conclusion that a budget bill must be balanced in order for legislators to continue to receive pay is supported by the legislative history of both propositions. The titie and summary of Proposition 58 explained that it "[rjequires enactment of a balanced budget where General Fund

16 . expenditures do not exceed estimated General Fund revenues." (Supp..Ballot Pamp., 2004 17 18 19 20 21 22 23 24 25 26 27 28 Primary Election, p. 10, Exhibit A to Defendant's Request for Judicial Notice herein.) And the ballot title and summary of Proposition 25 stated, "[I]f the Legislature fails to pass a budget bill by June 15, all members of the Legislature will permanentiy forfeit any reimbursement for salary and expenses for every day until the day the Legislature passes a budget bill." (Ballot Pamp., 2010 General Election, p. 52, Exhibit B to Defendant's Request for Judicial Notice herein.) Thus, there is a solid basis for the Conttoller's conclusion that continuing to pay legislators after the enactment of a budget bill which was not balanced would fail to implement the will of the voters. Of course, even assuming arguendo that the Confroller interpreted Proposition 25 incorrectly when he withheld legislative pay, that is not the same as saying that the Controller inttuded into a realm in which he has no autiiority whatsoever, as alleged in the Complaint. (Complaint, 4, 32.) To the contrary, it is at the core of the Confroller's constitutional and

statutory responsibility to determine whether warrants are legally authorized. After the Confroller
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has made his decision, it can be subjected to judicial scmtmy by way of a petition for writ of mandate. The Confroller's exercise of his audit power and responsibility, subject to potential judicial review, is well short of ulfra vires interference in the budgetary process calling for advance judicial prohibition.'' B. The Controller Had a Legitimate Basis for Withholding Legislative Pay

The power exercised by the Controller in connection with the 2011 budget confroversy is based on his duty to issue warrants only upon an unexhausted appropriation legally available for such payment. Specifically, the Califomia Constitution provides: "Money may be drawn from the Treasury only through an appropriation made by law and upon a Controller's duly drawn warrant." (Cal. Const., art. XVI, 7.) In that regard, Proposition 25 amended article IV, section 12, of the Constitution adding subdivision (h) which provides in relevant part, "in any year in which the budget bill is not passed by the Legislature by midnight on June 15, there shall be no appropriation from the current budget or future budget to pay any salary or reimbursement for fravel or living expenses for Members of the Legislature during any regular or special session for the period from midnight on June 15 until the day that the budget bill is presented to the Govemor. No salary or reimbursement for fravel or living expenses forfeited pursuant to this subdivision shall be paid retroactively." Consequently, in the performance of his constitutional duties, the Controller was required to exercise his judgment in detemiining whether or not the requirements of article IV, section 12 had been satisfied such that an appropriation was available from which payment could be made. Confrary to the assertion that the Controller lacks "the authority to ascertain the validity of the payment" when authorizing a warrant (Complaint, ^ 32), the Confroller is bound by statute to

^ Moreover, in contrast to warrants the Controller is directed to issue by an executive agency, where officials in the agency have presumably scmtinized the expenses in the first instance before seridmg them to the Controller's Office for payment, under the facts presented here, it appears that no one (otiier than the legislators themselves) has passed on the balancing of the budget, and thus the lawfulness ofthe legislators' salary and daily expense checks, prior to payment being sought.
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examine the basis for issuing a warrant before he pays it. Govemment Code section 12410 provides that in addition to "superintend[ing] the fiscal concems of the state," the Confroller shall "audit all claims against the state, and may audit the disbursement of any state money, for correctness, legality, and for sufficient provisions of law for payment." Moreover, the Legislature has specifically provided: "The Confroller shall draw warrants on the Treasurer for the payment of money directed by law to be paid out ofthe State Treasury; but a warrant shall not be drawn unless authorized by law, and unless . . . unexhausted specific appropriations provided by law are available to meet it." ( 12440, emphasis supplied.) Plaintiffs' observation that "the Confroller's duties are generally ministerial" (Complaint, 32) misses the point. The Controller's audit responsibilities contain "both ministerial and discretionary" powers. {Gilb v. Chiang, supra, 186 Cal.App.4th at p. 464.) "The Controller's discretionary or fact finding powers generally involve the determination ofthe factual circumstances necessary to establish the validity of particular claims . ..." {Tirapelle v. Davis (1993) 20 Cal.App.4th 1317,1329.) But tiie Controller's audit powers expressly mclude ensurmg that proposed payments are lawful. As the Court of Appeal said in Tirapelle, "the Controller's duty to audit claims against the Treasury includes the duty to ensure that expenditures are authorized by law, but does not include the power to review and approve or reject decisions of a department vested by the Legislature with autiiority over expenditures." {Id at p. 1335, footnote omitted.) There is a substantial body of case law affirming the Controller's authority to refiise to issue warrants to persons who perform work for the state if he believes the payment violates state law. {Westly V. California Public Employees'Retirement System Bd. of Administration (^Q^y) 105 Cal.App.4th 1095, 1106 [recognizing power of Controller to wdtiihold payments made in violation of state law].) In botii Stockburger v. Riley (1937) 21 Cal.App.2d 165, 170 and State Compensation Insurance Fund v. Riley (1937) 9 Cal.2d 126, 128, courts upheld the Confroller's refusal to pay independent contractors because such payments violated civil service laws. Sitnilariy, m Treu v. Kirkwood (1954) 42 Cal.2d 602, 604, tiie Supreme Court upheld tiie Controller's refusal to pay overtime to an employee exempt from civil service because such a
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payment would violate state law. In each of these cases, the Controller refused to pay based on his conclusion that the payment was not supported by law, and those seeking payment tested his conclusion by filing suit demanding payment. Ultimately, a court decided the cases based on tiie specific facts presented. Significantly, the Supreme Court of Califomia has expressly recognized the discretion with which the Confroller is entmsted, especially during the period before a new budget is signed: Under Califomia law, the Confroller and other public officials in the executive branch have been given the initial and primary responsibility for ascertaining the payments that lawfully may be made from the treasury during a budget impasse. These officials, of course, have the obligation to follow the law and must comply vwth controlling judicial decisions that have determined whether a particular category of payments properly may be made during a budget impasse. As explained by the Court of Appeal's decision, however, there are numerous grounds on which the Controller properly may authorize the payment of fiands from thefreasuryeven when a budget bill has not yet been enacted, and the question whether a particular payment or category of payments validly may be made often involves complex legal issues. {White V. Davis, supra, 30 Cal.4th at p. 562, emphasis added.) In sum, the Confroller may withhold payment to employees ofthe state if he concludes that such a payment violates state law, and those who disagree with his conclusion have a judicial remedy to curb any overreaching. (See, e.g., Lungren v. Davis, supra, 234 Cal.App.3d at pp. 809810 [writ of mandate lies to compel Controller to issue warrants to pay salary if legal basis for salary is shown].) C. The Lack of a Current Appropriation Was an Independent Basis for Withholding Legislative Pay

In addition to the provisions of Propositions 25 and 58, there was another, independent, and constitutionally significant basis for the Confroller's refusal to pay legislative salaries in June of 2011^there was no current appropriation for such salaries. The Supreme Court has made it clear that the Controller is not authorized under state law to make payments in the absence of an appropriation. {White v. Davis, supra, 30 Cal.4th at p. 535; see also Gilb v. Chiang, supra, 186 Cal.App.4th at p. 452 ["Witiiout an appropriation, the Confroller cannot pay the state's bills, including state employee salaries"]; Marshall v. Dunn (1886) 69 Cal. 223, 225 [Controller could not issue warrant for traveling expenses of attomey general as fund was exhausted]; Stratton v.
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Green (1872) 45 Cal. 149, 151 [Controller did not have the authority to issue warrant for salary of a member of the Board of Tide Land Commissioners where there was not a specific appropriation therefor].) Prior to the passage of Proposition 25, legislative salaries were continuously appropriated, and the appropriations were self-executing. (See White v. Davis, supra, 30 Cal.4th at p. 539.) At that time, the Controller could pay members of the Legislature through the uniform payroll system by drawing a warrant for the members' salaries based upon these continuing appropriations. After the passage of Proposition 25, however, the system changed dramatically. The initiative was drafted, in part, as a constitutional limitation on what may be lawfully appropriated by the Legislature, and the Confroller cannot issue warrants in violation of its terms. Under the terms of Proposition 25, funds cannot lawfully be appropriated to pay legislative salaries and expenses if a qualifying budget has not been enacted by Jime 15. (See Cal. Const., art. rv, 12, subd. (h) ["in any year in which the budget bill is not passed by the Legislature by midnight on June 15, there shall be no appropriation from the current budget orfixturebudget to pay any salary or reimbursement for travel or living expenses for Members of the Legislature .during any regular or special session for the periodfrom midnight on June 15 until the day that the budget bill is presented to the Governor"] [emphasis supplied].) Thus, no valid appropriation for these legislative salaries and expenses exists after June 15 of a given year unless and until a balanced budget is passed. It is beyond dispute that the Confroller is duty bound to determine whether a valid appropriation exists from which he can draw a warrant. ( 12410.) And, according to wellestablished case law, the Confroller must concur in the expendittire before authorizing the warrant to be issued. {California Highway Com. v. Riley (1923) 192 Cal. 97, 112 [Controller's audit powers are broad, and he should not issue warrant if he believes it illegal or improper]; Madden v. Riley (1942) 53 Cal.App.2d 814, 820 [same].) Proposition 25 placed a constitutional condition precedent on self-executing legislative pay appropriations by providing that no such appropriation exists absent the presentation of a balanced budget to the Govemor. The lack of a valid appropriation precluded the Controller from drawing legislative salary and expense warrants
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because a balanced budget bill was not timely presented to the Govemor for signature, establishing an independent basis for the Controller's actions in June of 2011. D, The Controller Did Not Violate Principles of Separation of Powers

Plaintiffs also allege that the Confroller "interject[ed] himself into the legislative budgetmaking process by deeming the Legislature's pay to be forfeited based upon his own analysis of the Legislature's budget calculations." (Complaint, * 32.) They likewise object to what they ^ deem "the Confroller's interjection of his executive office into the legislative budget process" and his "insinuating himself into "the budget deliberations and decisionmaking of the legislative branch." (Complaint, ^ 4.) This is not an accurate characterization of the Controller's actions. The Controller did not interfere in the budget processhe merely withheld legislators' paychecks for several days. By his words and by his deeds, the Confroller carefully hewed to his constitutional and statutory role related to auditing and paying (or refusing to pay) state fimds. The Controller's actions in June of 2011 were squarely within his authority to audit and to pay claims. Withholding legislator pay is not an intmsion into legislative functions. The Confroller's contemporaneous statements make it clear that he was careful not to overstep his constitutional role. On June 16, 2011, the State Controller announced that he intended to examine the state budget bills passed by both chambers of the Legislature (and later vetoed) "to determine whether the budget bills enacted show that expected revenues will equal or exceed planned expenditures." (SCO Press Release, June 16, 2011, Exhibit C to Defendant's Request for Judicial Notice herein.)'* The Confroller indicated that if the budget bills did not "meet the constitutional definition" of balanced, this would require the Controller to "forfeit" legislators' "pay under Proposition 25." {Ibid.) Thereafter, on June 21, 2011, the Confroller announced that his analysis of the budget bills was complete, and that "the spending plan was While these press releases are not attached to the Complaint, they are cited and referenced in it. Accordingly, it is appropriate to consider the contents of them in connection with this motion. (See Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285, fn. 3 ["Since the contents of the letter and media release form the basis of the allegations in the complaint, it is essential that we evaluate the complaint by reference to these documents"].) The Confroller has lodged a Request for Judicial Notice of the relevant press releases.
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incomplete and unbalanced." (SCO Press Release, June 21, 2011, Exhibit E to Defendant's Request for Judicial Notice herein.) Therefore, based upon the requfrements of Proposition 25, he announced that "the Legislature will forfeit thefr pay until a balanced budget is sent to the Govemor." {Ibid.) Significantly, in both of his press releases, the Confroller acknowledged the limits of his power vis-a-vis the budget. The June 16 release contained the followdng caveat: Nothing in the Constitution or state law gives the State Confroller the authority to judge the honesty, legitimacy or viability of a budget. The only authority this office has over the budget is tiirough Proposition 25 and 58, to determine whether the budget bills enacted show that expected revenues will equal or exceed planned expenditures. (Exhibit C to Defendant's Request for Judicial Notice herein.) The June 21 release similarly provided: "Nothing in the Constitution or state law gives the State Conttoller the authority to judge the honesty, legitimacy or viability of a budget. The Confroller can only determine whether the expected revenues will equal or exceed planned expenditures in the budget, as required by Article 4, Section 12(g) of the Constitution." (Exhibit E to Defendant's Request for Judicial Notice herein.) Thus, the Confroller has expressly disclaimed broad authority regardmg his assessment of the budget. What the Confroller did do was assess the legitimacy of issuing pay warrants and expense reimbursements to legislators, consistent.with his constitutional and statutory duties, and subject to judicial review, something that courts have, expressly approved: We conclude that it was not only the privilege, but it was the duty of the state controller, to audit the claim which is involved in the present proceeding and to determine whether it was valid or invalid, and to draw or withdraw his warrant therefor, dependent upon his conclusion in that regard. His determination conceming the validity of such claims is subject to review of the courts ui proper proceedings. {Madden v. Riley (1942) 53 Cal.App.2d.814, 821; see also Veterans of Foreign Wars v. State of California (1974) 36 Cal.App.3d 688, 697 ["Lawsuits to compel or restrain payment of claims

25 fraditionally take the form of mandamus actions against the Controller"].) The will of the people, 26 27 28 as expressed in Proposition 25, is that legislators forfeit their salaries and per diem expenses if they do not pass a budget on time. And the will of the people, as expressed in Proposition 58, is that any budget passed by the Legislature be balanced. Read together, the collective will is to .
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withhold legislative salaries until a balanced budget bill is passed and submitted to the Govemor. The Confroller's action in withholding pay based on his assessment in accordance with his audit function in Jime of 2011 was neither exttaordinary nor ulfra vires. Confrary to the implications of the Complaint, it is not improper or a violation of separation of powers principles for the Confroller to exercise some authority over the salaries of another branch of govemment pursuant to his audit powers. For example, a "judge of a court of record may not receive the salary for the judicial office held by the judge while any cause before the judge remains pending and undetermined for 90 days after it has been submitted for decision." (Cal. Const., art. VI, 19.) Govemment Code section 68210 likewise provides that a Superior Court judge is not entitled to his or her salary absent a signed affidavit that no cause of action befofe the judge remains pending and undetermuied for more than 90 days after it has been submitted for decision. But the ConfroIIet, upon receiving a complaint that a particular judge has exceeded the 90 day mle is required to satisfy himself that the requirements both of the Constitution and section 68210 have been met before a warrant can be drawn. To be sure, section 68210 entails delay of salary payment rather than forfeiture {Hassanally v. Firestone (1996) 51 Cal.App.4th 1241, 1244), but the fact remains that the Controller is required to dismpt the receipt of salary to a judicial officer if circumstances dictate. The actions of the Confroller in interpreting Proposition 25 are simply another instance in which the Confroller must exercise some judgment as to whether payments to one of the other branches of govemment is warranted. E. The Controller Was Entitled to Consider the Governor's Findings on the Budget Act

Through the preceding arguments, the Controller has demonstrated that his actions va. June of 2011 with respect to legislative pay were within the scope of his well-defined right and duty to audit prior to drawing warrants on the public fisc However, in addition to this clearly sufficient factual record, there exists another fact that weighs heavily in favor ofthe Confroller: the actions of the Govemor.
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The Complamt acknowledges that the Budget Act passed by the Legislature on June 15, 2011 was vetoed by the Govemor. (Complaint, 26.) The veto message containedfindingsthat were significant: "[The budget bill] contains legally questionable maneuvers . . . and unreahstic savings. . . . [I]t is not financeable and therefore wUl not allow us to meet our obligations as they occur." (Govemor's Veto Message, June 16, 2011, Exhibit D to The Confroller's Request for Judicial Notice herein.) The Confroller was free to weigh the additional fact of the Govemor's veto statement in exercising his audit function. Even if the Court accepted Plaintiffs' premise that the Confroller is a mere bystander in all things related to the budget, the Govemor's review and approval ofthe state's spending plan is cmcial, and his critique of the Budget Act passed on June 15, 2011 undermines Plaintiffs' claim that the Controller's actions withholding legislative pay were ultra vires. In addition to the myriad factors cited in sections III.A.-D., supra, the Controller was also entitied to rely on the Govemor's veto message in exercising his audit discretion and withholding legislative pay. Although a gubematorial declaration on the budget act was not necessary to justify the Confroller's actions, the existence of the Govemor's veto message bolsters the Confroller's exercise of discretion in this matter. III /// /// /// /// /// /// /// /// /// ///
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CONCLUSION Plaintiffs have brought an unripe dispute to this Court for the purpose of obtaining a wideranging advisory opinion. This Court should deny declaratory relief because this case is, at present, not justiciable. And even in the event that the Court does reach the merits, such merits should be resolved m favor of the Confroller and judgment entered accordingly. The Complaint fails to establish any overreaching or improper conduct on the Confroller's part, and his conduct should be declared to be within the scope of his right and obligation to audit claims prior to paying them. Dated: March 5, 2012 Respectftilly Submitted,
KAMALA D. HARRIS

Attomey General of Califomia .

PETER A. KRAUSE

Supervising Deputy Attomey General

r.
Ross C. MOODY Deputy Attomey General Attorrieys for Defendant State Controller John Chiang

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Memorandum of Points and Authorities in Support of Defendant John Chiang's Motion for Judgment on the Pleadings (34-2012-00117584)

DECLARATION OF SERVICE BY U.S. MAIL Case Name: No.: I declare: I am employed in the Office of the Attomey General, which is the office of a member ofthe Califomia State Bar, at which member's direction this service is made. I am 18 years of age or older and not a party to this matter. I am familiar with the business practice at the Office of the Attomey General for collection and processing of correspondence for mailing with the United States Postal Service. In accordance with that practice, correspondence placed in the intemal mail collection system at the Office of the Attomey General is deposited with the United States Postal Service with postage thereon fully prepaid that same day in the ordinary course of business. On March 5. 2012.1 served the attached MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT JOHN CHIANG'S MOTION FOR JUDGMENT ON THE PLEADINGS by placing a hue copy tiiereof enclosed in a sealed envelope in the intemal mail collection system at the Office ofthe Attomey General at 455 Golden Gate Avenue, Suite 11000, San Francisco, CA 94102-7004, addressed as follows: Fredric D. Woocher, Esq. Strumwasser & Woocher LLP 10940 Wilshire Boulevard, Suite 2000 Los Angeles, CA 90024 (Attorneys for Plaintiffs) Arthur G. Scotiand Attomey at Law P.O.Box 189206 Sacramento, CA 95818-9206 (Attomeys for Plaintiffs) I declare under penalty of perjury under the laws of the State of Califomia the foregoing is tme and correct and that this declaration was executed on March 5, 2012, at San Francisco, Califomia. J. Wong Declarant
SA20l2l04Se3

Darrell Steinberg, et al. v. John Chiang, et al. 34-2012-00117584

Signature

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