Thursday, September 9, 2010

Agency Hears Claims First, Constitutional Claims come Later

HGEA v. Lingle (HSC September 8, 2010)

Background. Governor Lingle issued Executive Order 09-02, which ordered certain State employees to be furloughed for 72 days over a two-year period; their pay would be automatically adjusted. Their union, the Hawai'i Government Employees Association, filed a complaint in the circuit court seeking declaratory relief. HGEA argued that the governor could not unilaterally impose furloughs because it impinges on their right to collective bargaining, which is protected by the Hawai'i Constitution. Haw. Const. Art. XIII, sec. 2 as well as their rights under HRS chapter 89. HGEA also filed a motion for a preliminary injunction. The circuit court granted the motion in part and concluded that the Order did infringe upon the worker's right to collective bargaining. The circuit court also concluded that the Order unilaterally--and therefore, unlawfully--alters the workers' wages. The circuit court rejected Lingle's argument that the Hawai'i Labor Relations Board (HLRB) retains exclusive jurisdiction because the circuit court has jurisdiction to hear constitutional claims. Lingle appealed. The case was transferred to the HSC.

The case may be moot, but the Public Interest Exception Applied. The HSC--in a footnote---agreed with Justice Acoba's dissent that the litigation over the furlough problem has been settled thereby making this case moot. However, both Justice Acoba and the HSC majority agreed that the public-interest exception applied because "the question involved affects the public interest and an authoritative determination is desirable for the guidance of public officials[.]" Doe v. Doe, 116 Hawai'i 323, 327, 172 P.3d 1067, 1071 (2007).

Hawai'i Labor Relations has Exclusive Jurisdiction to hear Labor-Related Claims. The HLRB has "exclusive original jurisdiction" to hear "[a]ny controversy concerning prohibited practices[.]" HRS § 89-14. That does not prohibit, however, proceedings in the circuit court pursuant to HRS § 89-12(e) or judicial review of the HLRB's orders. Id. The HSC held that HRS § 89-14 confers original exclusive jurisdiction over this case with the HRLB. The HSC relied on the legislative history of the statute; particularly when the Legislature amended HRS § 89-14 to its current language in reaction to Winslow v. State, 2 Haw. App. 50, 625 P.2d 1046 (1981), where the ICA held that the HLRB (formerly known as the Hawai'i Public Employee Relations Board) did not have exclusive jurisdiction. Id. at 56, 625 P.2d at 1051. According to the HSC, "the legislature clearly intended for the HLRB to have exclusive original jurisdiction over prohibited practice complaints" and that Winslow is incorrect.

HGEA Alleged a Prohibited-Practice Claim in its Complaint. Prohibited practices for public employers include the refusal "to bargain collectively in good faith with the exclusive representative[.]" HRS § 89-13(a)(5). According to the HSC, HGEA's complaint alleged that Lingle's imposition of furloughs circumvented the collective bargaining process because it automatically adjusts workers' wages and hours--thereby affecting the collective bargaining agreement. "Generally, pleadings should be construed liberally and not technically." Au v. Au, 63 Haw. 210, 221, 626 P.2d 173, 181 (1981). The HSC held that even though the HGEA did not use the words "prohibited practice" in its complaint, it essentially asserted a prohibited-practice claim, which is within the exclusive original jurisdiction of the HRLB.

No Plain-Language Analysis. "[T]he fundamental starting point for statutory interpretation is the language of the statute itself. Second, where the statutory language is plain and unambiguous, our sole duty is to give effect its plain and obvious meaning." Awakuni v. Awana, 115 Hawai'i 126, 133, 165 P.3d 1027, 1034 (2007). Here, the HSC construed HRS § 89-14 in an unusual way. It first recited the statute, then it relied on the legislative history to determine that the legislature intended the statute to confer exclusive original jurisdiction over the HLRB. But HRS § 89-14 specifically states just that. It would seem that the language of the statute was plain and unambiguous. So why did the HSC delve into legislative history for support?

Liberal Construction of Pleadings . . . Against Whom? Pleadings must be construed liberally. They must also be "construed as to do substantial justice." HRCP Rule 8(f). The liberal-construction rule is usually raised in opposition to a defendant's motion to dismiss for failure to state a claim. Plaintiffs typically rely on this rule to move beyond the pretrial motions stage. But this case shows that the rule can also work against the movant. Here, the HSC construed the plaintiff's pleading against the plaintiff.

This isn't the First Time this has Happened . . . This case seems eerily similar to Travelers Ins. Co. v. Hawaii Roofing, Inc., 64 Haw. 380, 641 P.2d 1333 (1982), when an insurance company brought a declaratory judgment in the circuit court rather than appealed an agency decision to the Board of Labor Appeals. Justice Edward Nakamura's pithy statement could easily apply to the HSC's analysis in this case: "The attempt at circumvention of statutory dictates is by no means novel; nor is our response unique." Id. The HSC never mentioned Travelers.

But what about the Constitutional Questions? Show some Restraint. "A fundamental and longstanding principle of judicial restraint requires that courts avoid reaching constitutional questions in advance of the necessity of deciding them." City and County of Honolulu v. Sherman, 110 Hawai'i 39, 56 n. 7, 129 P.3d 542, 559 n. 7 (2006). The HGEA asserted--and the circuit court agreed--that the furloughs infringed upon their workers' constitutional right to collective bargaining. However, the HLRB never heard the statutory claims--that the furloughs constituted a prohibited labor practice. Thus, the HSC held that there was no need for the circuit court to go ahead and "reach[ the] constitutional questions without first giving the HRLB the opportunity to address" the prohibited-practice claims. Had the HLRB determined that the furloughs were valid under HRS chapter 89, then the circuit court could examine whether it was constitutional. According to the HSC, the circuit court did not have to address the constitutional issue just yet.

Expediency is not Enough to Justify Circuit Court Action. The HSC also rejected the argument that the exigency of the furlough plan was not enough of a reason to circumvent the HLRB and seek relief in the circuit court. "[E]ven in the absence of constitutional restrictions, [courts] must still weigh the wisdom, efficacy, and timeliness of an exercise of their power before acting, especially where there may be an intrusion into areas committed to other branches of government." In re Attorney's Fees of Mohr, 97 Hawai'i 1, 9-10, 32 P.3d 647, 655-66 (2001).

Justice Acoba's Dissent. Justice Acoba agreed that the case was moot, but the public interest exception applied. He disagreed with the majority that there was no jurisdiction to proceed. Justice Acoba wrote the HGEA did not need to wait for the HLRB to render a decision before proceeding to the circuit court on a constitutional issue. The complaint challenges the constitutionality of the governor's furlough plan. Public employees have "the right to organize for the purpose of collective bargaining as provided by law." Haw. Const. Art. XIII, sec. 2. That includes "the ability to engage in negotiations concerning core subjects such as wages, hours, and other conditions of employment." UPW v. Yogi, 101 Hawai'i 46, 53, 62 P.3d 189, 196 (2002); see also Malahoff v. Saito, 111 Hawai'i 168, 140 P.3d 401 (2006). HGEA specifically pled a violation of this constitutional right to organize. And because the circuit court undoubtedly had jurisdiction to hear constitutional issues, the case properly proceeded.

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