All rise, California. You may be seated.

“The stress, the loss, are almost more than we can bear, and to then learn PG&E’s equipment likely caused the fire, we just feel broken. I just lost thirty-five years of my life. Everything I worked for since I moved to California went up in smoke.”—Kevin Burnett, plaintiff in a post-Camp Fire class action filed Wednesday against California’s largest utility.

Separately this week, U.S. District Judge William Alsup, overseeing PG&E’s probation in the 2010 San Bruno pipeline explosion, asked Atty. Gen. Xavier Becerra to report by Dec. 31 on whether the utility’s “operation or maintenance of PG&E power lines would constitute a crime under California law.” 

Brown's pension reforms land in court

Gov. Jerry Brown in 2011, outlining his 12-point plan.

The California Supreme Court hinted at a limited decision Wednesday in a far-reaching pension case challenging one of Gov. Jerry Brown’s most hard-fought legislative victories.

  • CALmatters’ Judy Lin writes that the case impacts a broader issue confronting governments throughout California: some $400 billion in unfunded liabilities for public employee retirement benefits.

Over public employee unions’ objections, Brown in 2012 won approval of a law curtailing retirement benefits for new state workers. Unions have been fighting it ever since.

  • The case before the high court tests the California Rule, a precedent that dates to 1955 and says workers’ pension benefits cannot be cut without providing similar benefits or compensation.
  • Specifically, it involves “air time,” a lucrative benefit the Legislature created in 2003, allowing employees to pay the state to artificially increase their time in state service, and increase their pension benefits. Brown’s 2012 law removed air time as a benefit, prompting the suit.

The court could alter the California Rule in the case, Cal Fire Local 2881 v. CalPERS, but more likely will decide it less dramatically.

  • Reading too much into justices’ questions is always dicey, but the L.A. Times wrote after oral arguments Wednesday that the court appeared to be tending toward “concluding the benefit did not amount to a pension.”

Even a limited decision could reverberate, however.

“If the court sides with Brown, unions worry that future city managers and governors will be emboldened to cut benefits they promised to their workers,” wrote The Sacramento Bee.

Anti-tax group sues over CalSavers

Brown signs CalSavers, flanked by Treasurer John Chiang, left, and Kevin de León.

Meanwhile, another state effort to help workers, many of them low-wage, save for retirement faces a lawsuit aimed at killing it before it takes effect.

  • Gov. Jerry Brown signed legislation in 2016 requiring that employers who don’t offer 401(k)-type plans allow workers to deduct 5 percent (employees can change the amount) of their pay to be placed in retirement accounts overseen by the California Treasurer.

The CalSavers program is rolling out now. Larger employers must enroll by June 2020, and smaller companies must register by 2022. As many as 7.5 million California workers will be enrolled automatically, though they can opt-out, too.

Former California Sen. Kevin de León, the bill’s author: “This is the largest expansion of retirement security since the creation of Social Security.”

Even Social Security, however, had its obstacles and opponents.

  • Wall Street money managers believe the program steps on their turf.
  • Federal law generally preempts states from getting involved in retirement issues.
  • The Republican-controlled Congress, after Donald Trump took office, repealed the Obama-era rules that had allowed California to proceed with the program.

The Howard Jarvis Taxpayers Association has sued. It doesn’t offer retirement plans to its eight employees and would be subject to CalSavers.

Jarvis president Jon Coupal: “This is another example of the state trying to supplant something privacy sector does perfectly well.”

Outgoing Treasurer John Chiang: “We are surprised that an organization that claims to care about lowering taxes is opposed to this program. [Jarvis] should be embracing CalSavers because it will ease the burden on taxpayer-funded health and human services programs.”

The state asked U.S. District Judge Morrison England in Sacramento to dismiss the suit. England could rule any time.

#MeToo comes for Kamala Harris aide

Harris questioning Brett Kavanaugh during U.S. Supreme Court hearings.

U.S. Sen. Kamala Harris, contemplating a presidential run, accepted the resignation Wednesday of a top aide who was the target of a sexual harassment suit that cost California taxpayers $400,000, The Sacramento Bee reported.

  • Larry Wallace worked for Harris when she was San Francisco district attorney, directed the Division of Law Enforcement when Harris was Attorney General and joined her U.S. Senate staff.

Among the allegations: Wallace placed his printer under his desk and insisted repeatedly that Danielle Hartley, his administrative assistant, climb under the desk to replace paper and ink.

  • The assistant sued in December 2016 after Harris won her U.S. Senate seat. Xavier Becerra was attorney general in May 2017 when the case was settled.

Harris spokeswoman Lily Adams: “We were unaware of this issue and take accusations of harassment extremely seriously.”

As part of the $400,000 settlement, Hartley resigned, agreed not to seek employment with the Department of Justice, and signed a non-disclosure clause forbidding her from discussing the settlement or alerting the media about the case, The Bee’s Alexei Koseff wrote.

  • Context: Harris was among the toughest inquisitors of Supreme Court Justice Brett Kavanaugh during his confirmation hearing. In Sacramento, meanwhile, Democratic legislators are pushing for legislation to end to nondisclosure agreements in sexual harassment cases.


FSB Core Strategies: Public Affairs. Ballot Campaigns. Legislative & Regulatory Fights

NIMBY v. YIMBY, the sequel

Housing density is about to return as a legislative issue.

Cities could not block new apartments within a half-mile of public transit and developers would no longer have to worry about minimum parking requirements, under legislation introduced earlier this week.

Sen. Scott Wiener, a San Francisco Democrat, is back with “Yes-In-My-Backyard” legislation aimed at easing California’s housing crisis while encouraging people to leave their cars behind.

  • It’s similar to a high-profile bill he unsuccessfully pushed in the last legislative session, but includes tweaks intended to blunt opposition.
  • Notably, Los Angeles Mayor Eric Garcetti, a foe of Wiener’s previous bill, supports the new iteration.

California is 3.5 million units short of what it needs to accommodate residents. The housing crisis has only grown more acute as tens of thousands of people lost their homes in the wildfires of 2018.

  • Organized labor will be a significant ally: California Labor Federation leader Art Pulaski told me housing affordability is among labor’s top issues.
  • Unions are mulling ways for the state to build housing and possibly a state bank to finance construction.

Commentary at CALmatters

Kim Belshé, First5 Los Angeles: A child’s earliest months and years are critical to her or his life trajectory. We know that 90 percent of a child’s brain develops before age 5. That’s why it’s so important to invest early in our children. First 5 L.A. and First 5 organizations across the state are eager to support our governor-elect in his efforts to build strong children. Like Gavin Newsom, we know we can and should do more to build strong children today.

Dan Walters, CALmatters: Gov. Jerry Brown, Sen. Dianne Feinstein and Republican House leader Kevin McCarthy have a deal on water in the San Joaquin Valley but its future is not certain.

Please email or call me with tips, suggestions and insights, [email protected]org, 916.201.6281. Shawn Hubler, [email protected]edits WhatMatters. Thanks for reading, please tell a friend and sign up here.

See you tomorrow.