For Nanny-Statism, California's Supreme Court Might Be Worse Than the State Legislature

Unlike lawmakers, who are usually are fairly forthright about their goals and intent, the justices have left Californians befuddled with several recent rulings.

There's Big Government, Big Labor, Big Business and now—drum-roll please—something called Big Soda. At a news conference Wednesday at the state Capitol, five lawmakers introduced a package of bills to ban the sale of Big-Gulp-style soft drinks and impose a state tax on sugary drinks.

"Big Soda has profited off of life-threatening disease and suffering for too long," intoned Assemblyman David Chiu (D-San Francisco).

These Nanny State efforts are commonplace, and provide fodder for people living in more-sensible locales. Look, they say, at how Sacramento politicians want to tax anything—and pose a constant threat to California's business climate. That largely is true. Highly publicized limits on the use of everything from plastic bags to straws gain much-deserved ridicule, but obscure some of the biggest threats to Californians' ability to live free and prosper.

Consider something we might call Big Justice. The term doesn't have the same ring as Big Soda, but the California Supreme Court, in recent months, has proven itself more nettlesome than the Legislature. That takes some doing. Unlike lawmakers, who are usually are fairly forthright about their goals and intent, the justices have left most of us befuddled.

The most obvious recent example involves a decision known as Dynamex Operations West v. Superior Court of Los Angeles. This ruling is wreaking havoc on California companies and especially on the growing gig economy. Dynamex is a same-day delivery service that had shifted its delivery drivers from employees to independent contractors. A driver sued and the court imposed a strict new "ABC test" to determine whether employers could classify their workers as employees or contractors.

Now, the court considers a worker to be an employee unless that company can prove that it a) does not direct the employee's performance; b) the employee's work is outside of the scope of the company's business; and c) workers have made a decision to go into business for themselves. A delivery business can hire, say, a plumber as a contractor to fix a sink in its headquarters, but it cannot consider drivers—who provide a core function in that business—as contractors. Lower courts still are hashing out when and how the state will apply this standard.

In the meantime, the decision has thrown myriad industries into a tizzy given the new rules could increase labor costs by a third. They reduce employee choice, also, given the vast majority of contractors prefer the flexibility of independent contracting to regular shift work. The ruling targets not only delivery drivers, but also ride-sharing companies such as Uber, barbers, landscapers, home healthcare workers and others. (Stormy Daniels penned an op-ed explaining how it can hamstring strippers, too.)

The California Legislature could provide a solution, but lawmakers are too busy banning Big Gulps, I suppose. Nevertheless, the state high court—not the Legislature—is the source of this Big Problem. This is not the only example of the court creating a mess by not being precise about its edicts.

Recently, CALmatters reminded us that the court has complicated a matter that had been relatively easy to understand since voters approved Proposition 218 in 1996. That initiative, writer Ben Christopher explained, "Clarified that any tax designated for a specific purpose—say, to fund affordable housing—needs two-thirds of the vote to pass."

Simple. But in the 2017 California Cannabis Coalition v. City of Upland case, the state Supreme Court ruled that a local citizen-derived initiative was not a local-government action. "If citizen initiatives aren't acts of 'local government' when it comes the timing of an election," Christopher asked, "does that mean they aren't subject to Prop. 218's other rules—namely, that tax measures need two-thirds of the vote to pass?" That's a good question, but one the court didn't clearly answer.

The decision seems to mean that when city officials place tax-increase measures on the ballot, those measures are subject to two-thirds voter approval—but when local citizens do the same thing these measures only require a simple-majority vote. That would circumvent local tax protections as interest groups gather signatures and place simple-majority tax measures on the ballot early and often. Cities don't know how to handle the murky situation.

Now, we're awaiting the court's decision on a matter that could—without exaggeration—determine the long-term fiscal health of California cities. It involves the so-called "California Rule," which forbids governments from rolling back future pension benefits for current employees. Even the Brown administration asked the court to reconsider the rule. If they can't change formulas, municipalities have few options to control their pension liabilities other than raising taxes and cutting services.

Based on recent history, the court probably will create yet another unresolved mess. As bad as it is to have a Legislature laser-focused on combating Big Soda and other nonsense, it may be worse to have a Big Court that isn't clear about what it's doing.

This column was first published by the Orange County Register.