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Based on recent oral arguments before the California Supreme Court, it appears as if the justices want to steer clear of any expansive new rulings on wage laws. Instead, the court seems to be leaning toward a narrow opinion favoring the city of Long Beach, but falling short of a broader ruling that both sides had all but begged for during arguments held in early October. Scott Kronland, a San Francisco attorney representing the State Building Trades Council as amicus curiae, told the justices that a narrow ruling would only consign workers, employers and contractors “to years of confusion about whether prevailing wages should be paid. [The court] can resolve the issue now, and I suggest it should.” The case, City of Long Beach v. Department of Industrial Relations, S118450, turns on the question of whether the state’s 107 charter cities are governed by state wage laws. Under the state constitution, charter cities are self-governing. But the Second District Court of Appeal had ruled earlier in the Long Beach litigation that such cities are not exempt from state laws requiring the payment of currently prevailing wages for public works projects. M. Katherine Jenson, a Costa Mesa lawyer representing the League of California Cities, told the Supreme Court that the lower court ruling raises a “very critical issue” for charter cities because it could place a heavy financial burden on them in completing public projects — particularly in tough economic times. Charter cities, Jenson argued, might have to cut back on funding in other areas — such as day care services and police patrols — in order to fund public projects. In the pending case, Long Beach in 1998 provided a grant of $1.5 million to the Los Angeles Society for the Prevention of Cruelty to Animals for a $10 million shelter. The money was limited to pre-construction costs, including design, insurance, legal fees and consultants. That was a critical distinction because state law requires public entities to pay workers the prevailing wage, rather than a lower salary, if any of the money goes toward actual construction. The state’s Department of Industrial Relations declared that the project was a public work and was not exempt from the prevailing wage law. The appellate court agreed, adding that the issue was one of statewide concern, which trumped Long Beach’s argument that it was simply a municipal matter. During oral arguments before the Supreme Court, lawyers for both sides said they wanted the court to decide the broader issue about whether the prevailing wage law was a matter of statewide concern. Justice Ming Chin, however, started the arguments by suggesting that the court was strongly considering ruling in Long Beach’s favor by simply finding that the shelter funding was only for pre-construction work and, as a result, not subject to the prevailing wage law. Jenson argued that a narrow ruling, while good news for Long Beach, would leave the lower court ruling intact and subject charter cities to the prevailing wage law. “The court of appeal really threw a curve to us all,” she said. Similarly, Long Beach City Attorney Robert Shannon said a victory for his city would be shallow. “If, in fact, the court says prevailing wages are a statewide concern, we have lost [the bigger issue],” he told the justices. Chin asked the lawyers whether there was a way the court could decide the case for Long Beach on narrow grounds while still addressing the broader concerns. “Are you telling us you don’t want to win on the first issue?” he asked Shannon. Shannon replied that he indeed wanted to win but added that the high court could — even in dicta — “certainly indicate that under the clear law that’s existed since 1932, prevailing wages continue not to be an issue of statewide concern.” In his time at the podium, Los Angeles lawyer Anthony Mischel, representing the Department of Industrial Relations, argued that the court has historically given state agencies with expertise in particular areas great deference. His agency, he said, decided that the animal shelter was not exempt. “That interpretation,” he said, “should be given heightened deference.” A ruling in the case is expected within 90 days of the Oct. 6 arguments. Mike McKee is an associate editor at The Recorder .

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