Coachella Valley Mosquito & Vector Control District v. California Public Employment Relations Board

general, a party must exhaust administrative remedies before resorting to the courts. (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280 , 292 [ 109 P.2d 942 ]; see California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133 , 1148 [ 43 Cal.Rptr.2d 693 , 899 P.2d 79 ].) Under this rule, an administrative remedy is exhausted only upon “termination of all available, nonduplicative administrative review procedures.” (California Correctional Peace Officers Assn. v. State Personnel Bd., supra, at p. 1151; see also Jonathan Neil & Assoc., Inc. v. Jones (2004) 33 Cal.4th 917 , 933 [ 16 Cal.Rptr.3d 849 , 94 P.3d 1055 ] [exhaustion requires agency decision of “ ‘entire controversy’ ”]; People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102 , 124 [ 3 Cal.Rptr.3d 429 ] [administrative process must “ ‘ “run its course” ’ ”]; Bleeck v. State Board of Optometry (1971) 18 Cal.App.3d 415 , 432 [ 95 Cal.Rptr. 860 ] [exhaustion requires “a full presentation to the administrative agency upon all issues of the case and at all prescribed stages of the administrative proceedings”].)

“The exhaustion doctrine is principally grounded on concerns favoring administrative autonomy (i.e., courts should not interfere with an agency determination until the agency has reached a final decision) and judicial efficiency (i.e., overworked courts should decline to intervene in an administrative dispute unless absolutely necessary).” (Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377 , 391 [ 6 Cal.Rptr.2d 487 , 826 P.2d 730 ]; accord, Jonathan Neil & Assoc., Inc. v. Jones, supra, 33 Cal.4th at p. 932; see also Sierra Club v. San Joaquin Local Agency Formation Com. (1999) 21 Cal.4th 489 , 501 [ 87 Cal.Rptr.2d 702 , 981 P.2d 543 ].) The exhaustion requirement applies to defenses as well as to claims for affirmative relief (Styne v. Stevens (2001) 26 Cal.4th 42 , 57 [ 109 Cal.Rptr.2d 14 , 26 P.3d 343 ]; see Top Hat Liquors v. Department of Alcoholic Beverage Control (1974) 13 Cal.3d 107 , 110 [ 118 Cal.Rptr. 10 , 529 P.2d 42 ]), and we have described exhaustion of administrative remedies as “a jurisdictional prerequisite to resort to the courts” (Abelleira v. District Court of Appeal, supra, 17 Cal.2d at p. 293; accord, Styne v. Stevens, supra, at p. 56; Johnson v. City of Loma Linda (2000) 24 Cal.4th 61 , 70 [ 99 Cal.Rptr.2d 316 , 5 P.3d 874 ]).

The doctrine requiring exhaustion of administrative remedies is subject to exceptions. (Public Employment Relations Bd. v. Superior Court (1993) 13 Cal.App.4th 1816 , 1827 [ 17 Cal.Rptr.2d 323 ].) Under one of these exceptions, “[f]ailure to exhaust administrative remedies is excused if it is clear that exhaustion would be futile.” (Jonathan Neil & Assoc., Inc. v. Jones, supra, 33 Cal.4th at p. 936; see also Honig v. Doe (1988) 484 U.S. 305 , 327 [ 98 L.Ed.2d 686 , 108 S.Ct. 592 ].) “The futility exception requires that the

Here, the Court of Appeal concluded that the futility exception excused the District’s failure to exhaust its administrative remedies because the PERB had held, in other cases, that all MMBA unfair practice charges filed with the PERB on and after July 1, 2001, are subject to the three-year limitations period in Code of Civil Procedure section 338. Therefore, the PERB had declared what its ruling would be on the limitations issue, even though it had not reviewed the board agent’s ruling in this particular matter.

That analysis is flawed. For the futility exception to apply, it is not sufficient that a party can show what the agency’s ruling would be on a particular issue or defense. Rather, the party must show what the agency’s ruling would be “ ‘on a particular easel ” (Jonathan Neil & Assoc., Inc. v. Jones, supra, 33 Cal.4th at p. 936, italics added.) This follows from the exhaustion doctrine itself, which “precludes review of an intermediate or interlocutory action of an administrative agency.” (Alta Loma School Dist. v. San Bernardino County Com. on School Dist. Reorganization (1981) 124 Cal.App.3d 542 , 554 [ 177 Cal.Rptr. 506 ]; see also McHugh v. County of Santa Cruz (1973) 33 Cal.App.3d 533 , 538-539 [ 109 Cal.Rptr. 149 ] [exhaustion doctrine “requires that a party must not only initially raise the issue in the administrative forum, but he must proceed through the entire proceeding to a final decision on the merits of the entire controversy”].)

Here, it is not sufficient that we know what the PERB’s final ruling would have been on the District’s limitations defense. For the futility exception to apply, the District must show how the PERB would have ruled on the CSEA’s unfair practices charge. Had the administrative proceeding run its course, the District might have prevailed on some procedural ground other than expiration of the limitations period, or it might have prevailed on the merits. Thus, the District did not show that further administrative proceedings would have been futile because the outcome of those proceedings was known in advance.

Although we do not agree with the Court of Appeal’s reasoning, we agree with its conclusion that the District was excused from exhausting its administrative remedies with the PERB. Under another exception, exhaustion of administrative remedies may be excused when a party claims that “the agency lacks authority, statutory or otherwise, to resolve the underlying

Here, the limitations issue implicates the PERB’s administrative authority or jurisdiction because the District contends that the applicable limitations period for MMBA unfair practice charges is found in Government Code section 3541.5, subdivision (a), which states that- the PERB “shall not . . . [f] . . . [i]ssue a complaint in respect of any charge based upon an alleged unfair practice occurring more than six months prior to the filing of the charge.” Under this provision, expiration of the six-month limitation period deprives the PERB of authority to issue a complaint.

In deciding whether to entertain a claim that an agency lacks jurisdiction before the agency proceedings have run their course, a court considers three factors: the injury or burden that exhaustion will impose, the strength of the legal argument that the agency lacks jurisdiction, and the extent to which administrative expertise may aid in resolving the jurisdictional issue. (Public Employment Relations Bd. v. Superior Court, supra, 13 Cal.App.4th at p. 1830.)

Here, in regard to the first factor, the District did not show that it would suffer any unusual or irreparable injury if it were required to litigate the CSEA’s unfair practices charge to completion before obtaining a judicial resolution of the jurisdictional limitations issues. (See Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266 , 1269 [ 258 Cal.Rptr. 66 ] [administrative remedy not inadequate “merely because additional time and effort would be consumed by its being pursued through the ordinary course of the law”].) But the District is not the only party affected by this issue, and there is a significant public interest in obtaining a definitive resolution of this fundamental legal question. (See Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155 , 170-171 [ 6 Cal.Rptr.2d 714 ] [exhaustion excused because of urgent need of judicial determination]; see also Lindeleaf v. Agricultural Labor Relations Bd. (1986) 41 Cal.3d 861 , 871 [ 226 Cal.Rptr. 119 , 718 P.2d 106 ] [exhaustion excused when case raises “important questions of public policy”]; Action Apartment Assn. v. Santa Monica Rent Control Bd. (2001) 94 Cal.App.4th 587 , 615 [ 114 Cal.Rptr.2d 412 ] [same].) So the first factor weighs in favor of judicial intervention.

In regard to the second factor, as explained more fully in the next part of this opinion, the District makes a strong and ultimately persuasive argument

To determine the limitations period for an unfair practice charge to the PERB alleging an MMBA violation, we begin by reviewing the history of the MMBA and of the PERB.

A. The MMBA

In 1961, the Legislature enacted the George Brown Act (Stats. 1961, ch. 1964, pp. 4141-4143), which for the first time recognized the rights of state and local public employees to organize and to have their representatives meet and confer with their public agency employers over wages and working conditions. In 1968, the Legislature went a step further by enacting the MMBA (Stats. 1968, ch. 1390, pp. 2725-2729), which “authorized labor and management representatives not only to confer but to enter into written agreements for presentation to the governing body of a municipal government or other local agency.” (Glendale City Employees’ Assn., Inc. v. City of Glendale (1975) 15 Cal.3d 328 , 331 [ 124 Cal.Rptr. 513 , 540 P.2d 609 ], fn. omitted; see also Voters for Responsible Retirement v. Board of Supervisors (1994) 8 Cal.4th 765 , 780-781 [ 35 Cal.Rptr.2d 814 , 884 P.2d 645 ].) Although the MMBA covered most employees of local public entities, it did not include school districts’ employees. (Stats. 1968, ch. 1390, § 2, p. 2726; see Glendale City Employees’ Assn., Inc. v. City of Glendale, supra, at p. 331, fn. 1.) State employees were excluded from the MMBA in 1971. (Stats. 1971, ch. 254, § 2, pp. 401-402.)

The MMBA imposes on local public entities a duty to meet and confer in good faith with representatives of recognized employee organizations, in order to reach binding agreements governing wages, hours, and working conditions of the agencies’ employees. (Gov. Code, § 3505.) “The duty to bargain requires the public agency to refrain from making unilateral changes in employees’ wages and working conditions until the employer and employee association have bargained to impasse . . . .” (Santa Clara County Counsel Attys. Assn. v. Woodside, supra, 7 Cal.4th at p. 537.)

When the Legislature enacted the MMBA in 1968, it had not yet created the PERB, and it did not include in the MMBA any provisions expressly authorizing either administrative or judicial proceedings to enforce its provisions. Resolving the resulting uncertainty regarding methods of enforcement, this court in 1994 concluded that MMBA-created rights and duties were enforceable by a traditional mandate action under Code of Civil Procedure section 1085. (Santa Clara County Counsel Attys. Assn. v. Woodside, supra, 7 Cal.4th at p. 539.)

Although no published appellate decision ever expressly determined what statute of limitations applied to a mandate action to enforce MMBA-created rights and duties, a Court of Appeal held that the three-year statute of limitations in subdivision (a) of Code of Civil Procedure section 338 (hereafter section 338(a)) applied to an action to enforce a “state labor law.” (Giffin v. United Transportation Union, supra, 190 Cal.App.3d at p. 1364.) The parties here appear to agree that, before the Legislature vested the PERB with exclusive jurisdiction over MMBA unfair practice charges, the three-year period specified in section 338(a) applied to a traditional mandate action brought in superior court alleging an unfair practice under the MMBA.

B. The PERB

The history of the PERB begins in 1975, when the Legislature adopted the Educational Employment Relations Act (Gov. Code, §§ 3540-3549.3; hereafter the EERA), which governs employer-employee relations for public schools (kindergarten through high school) and community colleges. (Stats. 1975, ch. 961, § 2, pp. 2247-2263.) As part of this new statutory scheme, the Legislature created the Educational Employment Relations Board (EERB),

As the parties recognize, determining what limitations period applies to an MMBA unfair practice charge requires construction of the relevant statutes. When engaged in statutory construction, our goal is “to ascertain the intent of the enacting legislative body so that we may adopt the construction that best effectuates the purpose of the law.” (Hasson v. Mercy American River Hospital (2003) 31 Cal.4th 709 , 715 [ 3 Cal.Rptr.3d 623 , 74 P.3d 726 ].)

The Court of Appeal here concluded that the six-month limitations period in Government Code section 3541.5, a provision of the EERA, applies also to unfair practice charges filed with the PERB under the MMBA. The PERB argues, instead, that because the Legislature did not specify a limitations period when it vested the PERB with jurisdiction over MMBA unfair practice charges, it must have intended to continue the existing three-year statute of limitations that had applied to actions filed in superior court. The PERB invokes the rule of statutory construction that when the Legislature amends a statute without altering parts of the statute that have previously been judicially construed, the Legislature is deemed to have been aware of and to have acquiesced in the previous judicial construction. (See Sharon S. v. Superior Court (2003) 31 Cal.4th 417 , 433 [ 2 Cal.Rptr.3d 699 , 73 P.3d 554 ]; People v. Masbruch (1996) 13 Cal.4th 1001 , 1007 [ 55 Cal.Rptr.2d 760 , 920 P.2d 705 ].)

But “[t]he presumption of legislative acquiescence in prior judicial decisions is not conclusive in determining legislative intent” (Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142 , 1156 [ 278 Cal.Rptr. 614 , 805 P.2d 873 ]), and there are several reasons not to apply the presumption here.

We view this suggested inference as implausible and unsupported. As we have remarked, “[i]n the area of statutory construction, an examination of what the Legislature has done (as opposed to what it has left undone) is generally the more fruitful inquiry.” (Harris v. Capital Growth Investors XIV, supra, 52 Cal.3d at p. 1156.) Here, what the Legislature did was to remove from the courts their initial jurisdiction over MMBA unfair practice charges. Assuming the Legislature was aware that a three-year limitations period had applied to traditional mandate actions filed in superior court to enforce the MMBA, we assume also that the Legislature was aware that section 338(a) ’s three-year period was forum-specific—that is, it applied only to judicial proceedings. By changing the forum—vesting an administrative agency (the PERB) rather than the courts with initial jurisdiction over MMBA charges— the Legislature abrogated the three-year statute of limitations under section 338(a), and we assume that this abrogation was intentional and not inadvertent.

Finally, and perhaps most importantly, we do not construe statutes in isolation; rather, we construe every statute with reference to the whole system of law of which it is a part, so that all may be harmonized and anomalies avoided. (In re Marriage of Harris (2004) 34 Cal.4th 210 , 222 [ 17 Cal.Rptr.3d 842 , 96 P.3d 141 ]; Mejia v. Reed (2003) 31 Cal.4th 657 , 663 [ 3 Cal.Rptr.3d 390 , 74 P.3d 166 ].) The MMBA, which we construe here, is part of a larger system of law for the regulation of public employment relations under the initial jurisdiction of the PERB. The PERB suggests no way in which MMBA unfair practice charges differ from unfair practice charges under the other six public employment relations laws within the PERB’s jurisdiction—the Dills Act, the EERA, the HEERA, the TCEPGA, the TCIERA, and the TERA—so as to justify a limitations period that is six times longer than the six months allowed under each of these other laws. The PERB suggests no rational ground upon which the Legislature could have

The PERB relies also on the rule of statutory construction that when the Legislature uses a critical word or phrase in one statute, the omission of that word or phrase in another statute dealing with the same general subject generally shows a different legislative intent. (See In re Young (2004) 32 Cal.4th 900 , 907 [ 12 Cal.Rptr.3d 48 , 87 P.3d 797 ].) Thus, the PERB argues that because the Legislature included an express six-month limitation period in every other public employment relations law under the PERB’s jurisdiction, the omission of an express six-month limitation period in the MMBA is compelling evidence of a different legislative intent. We would agree if there were any plausible ground for the Legislature to draw such a distinction, or, in other words, if this line of reasoning did not lead to an inexplicable anomaly. The rule that the PERB cites is merely one of several guides to statutory construction; it applies generally but not universally, and we do not find it helpful or controlling here.

The PERB argues that nothing in the language of the MMBA supports an inference that the Legislature intended a six-month limitations period for an MMBA unfair practice charge. But Government Code section 3509, which vests the PERB with jurisdiction over MMBA matters, states in subdivision (b) that “[a] complaint alleging any violation of this chapter or of any rules and regulations adopted by a public agency pursuant to Section 3507 or 3507.5 shall be processed as an unfair practice charge by the board.” (Italics added.) This language is appropriately read as referring to and incorporating an existing body of law concerning the manner in which the PERB processes unfair practice charges, including the limitations period for unfair practices charged under the three other then existing public employment relations laws—the EERA, the Dills Act, and the HEERA. The Legislature’s later adoption of a six-month limitations period for the TCEPGA, the TCIERA, and the TERA is further evidence that the Legislature regards six months as an appropriate limit for bringing an unfair practice charge under each of the various schemes governing employer-employee relations in state and local government, all of which are now under the PERB’s jurisdiction.

The PERB argues that Government Code section 3509, subdivision (b), which requires the PERB to “apply and interpret unfair labor practices consistent with existing judicial interpretations of this chapter,”

We have reviewed the documents judicially noticed by the Court of Appeal relating to Senate Bill No. 739 (1999-2000 Reg. Sess.), the legislation that vested the PERB with jurisdiction over MMBA unfair practice charges. (See Dowhal v. SmithKline Beecham Consumer Healthcare (2004) 32 Cal.4th 910 , 922, fn. 4 [ 12 Cal.Rptr.3d 262 , 88 P.3d 1 ] [documents that the Court of Appeal has judicially noticed become part of die record on appeal]; Ventura County Deputy Sheriffs’ Assn. v. Board of Retirement (1997) 16 Cal.4th 483 , 502, fn. 22 [ 66 Cal.Rptr.2d 304 , 940 P.2d 891 ]; Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257 , 274, fn. 7 [ 41 Cal.Rptr.2d 220 , 895 P.2d 56 ].) We find nothing in those documents to cause us to alter our conclusion that the Legislature intended a six-month limitations period for an MMBA unfair practice charge to the PERB. The topic of a limitations period for an unfair practice charge is not discussed in any of the legislative documents, nor do the documents suggest that the Legislature regarded the MMBA as differing from other public employment labor laws under the PERB’s jurisdiction in a manner that would require or justify a substantially longer limitations period.

The PERB and the CSEA argue that if, as we have concluded, transfer of initial jurisdiction over MMBA unfair practice charges from the superior courts to the PERB shortened the limitations period from three years to six months, this shortened period may not be applied retrospectively to unfair practices occurring before July 1, 2001, the legislation’s effective date or, indeed, to any unfair practice occurring before the Court of Appeal’s decision.

Legislation that shortens a limitations period is considered procedural and is applied retroactively to preexisting causes of action, so long as

Applying these legal principles, the Court of Appeal in this case concluded that the legislation vesting PERB with jurisdiction over MMBA unfair practice charges, effective July 1, 2001, shortened the applicable limitations period from three years to six months. This shortened limitations period applies retroactively to MMBA unfair practice charges based on conduct that occurred before July 1, 2001, provided that parties are given a reasonable time in which to file such charges with the PERB. Concluding that six months was a reasonable time in this context, the Court of Appeal held that for MMBA unfair practices occurring before July 1, 2001, a charge filed with the PERB was timely if brought within three years of the occurrence of the unfair practice, or within six months of July 1, 2001 (in other words, before January 1, 2002), whichever was sooner. We agree that this is a correct application of the controlling legal principles.

The PERB and the CSEA argue in substance that the Court of Appeal’s holding retroactively extinguishes existing unfair practice claims because parties had no notice of the six-month limitations period until the Court of Appeal issued its decision. This assertion erroneously assumes that the Court of Appeal, rather than the Legislature, shortened the limitations period to six months and that this shortened limitations period took effect only when the Court of Appeal issued its decision. To the contrary, the Legislature established the six-month limitations period, effective July 1, 2001. After that date, there was no valid legal basis for any party, or for the PERB, to rely on the previous three-year limitations period, which had applied to judicial actions to enforce the MMBA. In determining the applicable limitations period, the Court of Appeal merely decided a legal question; it did not change any settled rule on which parties could reasonably have relied. (See Brennan v. Tremco Inc. (2001) 25 Cal.4th 310 , 318 [ 105 Cal.Rptr.2d 790 , 20 P.3d 1086 ].) Its holding, which we adopt, did not constitute an unfair retroactive change in the law.

The Court of Appeal’s judgment is affirmed.

George, C. J., Baxter, J., Werdegar, J., Chin, J., Brown, J., and Moreno, J., concurred.