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RESPONDENTS BRIEF Attorneys for Plaintiffs Respondents

VIEWS: 11 PAGES: 58

									                                                                         49,3 79
                                                                                M


           COURT OF APPEAL OF THE STATE OF CALIFORNIA

            SECOND APPELLATE DISTRICT, DIVISION THREE



EDWARD GARDNER; MARTIN FIGUEROA;        .NO.           2 Civ. B 103980
TERRY AKISON; KELLY MCCONNELL;
RAYMOND JOHNSON; and PATRICIA       i    (Los Angeles
THORNTON,                                 Superior Court
                                    ;     No. BC 086818)
          Plaintiffs/Respondents,   )

          vs.
                                    i          :   4
                                                                           \^
COUNTY OF LOS ANGELES; BOARD OF
SUPERVISORS FOR THE COUNTY OF       i                     ,
                                                          I L. .   ‘..
LOS ANGELES, and DOES 1 through
20, inclusive,

          Defendants/Appellants.
                                    )




                        RESPONDENTS' BRIEF


         Appeal from Superior Court, Los Angeles County
                   Honorable Aviva Bobb, Judge




RICHARD A. ROTHSCHILD, X67356       MARE ROSENBAUM, X59940
ROBERT D. NEWMAN, X86534            A.C.L.U. FOUNDATION OF
CLARE PASTORE, x135933                 SOUTHERN CALIFORNIA
WESTERN CENTER ON LAW & POVERTY     1616 Beverly Blvd.
3701 Wilshire Blvd., Suite 208      Los Angeles, CA 90026
Los Angeles, CA 90010-2809          Telephone: 213/977-9500
Telephone: 213/487-7211
                     PAUL L. FREESE, JR, X139133
                     PUBLIC COUNSEL
                     601 So. Ardmore Avenue
                     Los Angeles, California 90005
                     Telephone:  2131385-2977

                Attorneys for Plaintiffs/Respondents
                            TABLE OF CONTENTS

                                                                                                 Paues


INTRODUCTION AND SUMMARY OF ARGUMENT . . . . . . . . . . .                                           1


STATEMENT OF FACTS AND THE CASE
      A.    The     GA    Program      ......   .   .   .   .   .   .   .   .    .   .   .           5

      B.    The County's Illegal Grant Reductions
            and Plaintiffs' Attempt To Stop   Them                              .....    .           5

      C.    Gardner I and Initial Proceedings on
            Remand . . . . . . . . . . . . . . . . . . . .                               .           6

      D.    Summary Judgment Proceedings and This
            Appeal . . . . . . . . . . . . . . . . . . . .                               .           7

STATEMENT OF APPEALABILITY ............... .                                                        11


ARGUMENT

I.    AN UNBROKEN LINE OF CALIFORNIA CASES HAS
      HELD THAT PUBLIC ASSISTANCE RECIPIENTS
      WHOSE GRANTS ARE ILLEGALLY DENIED OR
      REDUCED ARE ENTITLED TO PAYMENT OF
      RETROACTIVE        BENEFITS.         . . . . . . . . . . . . . . .                 .          11

II.   EVEN IF THERE WERE AN EQUITABLE EXCEPTION
      TO THE RULE REQUIRING PAYMENT OF RETRO-
      ACTIVE BENEFITS, THE TRIAL COURT DID NOT
      ABUSE ITS DISCRETION IN REFUSING TO APPLY
      SUCH AN EXCEPTION TO THIS CASE. . . . . . . . . . .                                .          16

      A.    The County Is Not Entitled to Rely
            Upon Its Victory In The Trial Court
            To Avoid Its Obligation To Pay
            Retroactive       Benefits       . . . . . . . . . . . . .                   .          17

      B.    The County's Failure To Make An
            Earlier Application For Relief
            Under S17000.6 16 Irrelevant To
            These Proceedings. . . . . . . . . . . . . . .                               .          21

      C.     The Trial Court Was Not Required
             To Rebalance The Harms In Favor
             Of The     County.    . . . . . . . . . . . . . . . .                           .      23



                                        i
                                                                                      Paues

 III. BECAUSE THE AMOUNT OF THE LIABILITY
      IMPOSED BY THE JUDGMENT IS UNKNOWN AND
      THE COUNTY HAS AN ADEQUATE POST-JUDGMENT
      REMEDY, CONSIDERATION OF THE COUNTY'S
      FISCAL IMPOSSIBILITY DEFENSE WOULD BE
      PREMATURE, AND SUCH A DEFENSE SHOULD
      NOT BE RECOGNIZED IN THE ABSENCE OF
      STATUTORY         AUTHORITY         . . . . .         . . . . . . . . . . . .     25
        A.   The Extent Of The County's Fiscal
             Liability Is Far Less Than $166
             Million.               . . . . . . . . .   . . . . . . . . . . .           25
        B.   Consideration Of A Fiscal
             Impossibility Defense Would Be
             Premature At Best. . . . . . . . . . . . . . . .                           27
        C.   There Is No Judicially-Created
             Fiscal Impossibility Defense In
             GA Actions . . . . . . . . . . . . . . . . . . .                           30
- IV.   NO STATUTES PREVENT A RETROACTIVE
        BENEFITS          AWARD         . .    . . . . . . . . . . . . . . . . . .      33
        A.   Section 17000.5's In-Kind
             Provisions Do Not Preclude A
             Retroactive     Benefits     Award.                  ...........           33
        B.   S.B. 681's Permission For Counties
             To Implement A Health Care Credit
             Does Not Change The Law As It
             Existed In Gardner I, and Therefore
             Does Not Preclude Retroactive
             Benefits. . . . . . . . . . . . . . . . . . . . .                          34
  .’


        C.   The County Has No Remedy In This
             Case  Under     Section    17000.6.                 ...........            37
        D.   A Retroactive Benefits Award Is
             Consistent With Statutory Policy.                         ........         38
V.      GARDNER I MUST BE APPLIED RETROACTIVELY
        SO AS TO GIVE EFFECT TO A STATUTORY RULE
        THAT HAD PREVIOUSLY BEEN MISCONSTRUED. . . . . . . . .
VI.     NONE OF THE COUNTY'S PROCEDURAL
        ARGUMENTS ARE MERITORIOUS. . . . . . . . . . . . . . .

VII. THE AWARD OF PREJUDGMENT INTEREST
     W A S P R O P E R . . . . . . . . . . . . . . . . . . . . . .


                                    ii
                                                                                      Pacres


VIII.THE TRIAL COURT DID NOT ABUSE ITS
     DISCRETION IN ISSUING A PERMANENT
     INJUNCTION.                . . . . . . . . . . . . . . . . . . . . .               46

CONCLUSION                          . . . . . . . . . . . . . . . . . . . . . . . .      48




                                       iii
                       TABLE OF AUTHORITIES



                               CASES
Bd. of Sot. Welfare v. County of L.A.,
     27 Cal.2d     81   (1945)   ........           1, 11, 12, 15, 16, 23
Blank   v.   Kirwan,   39   Cal.3d     311      (1985).             ..........            17
Board of Supervisors v. McMahon, 219
     Cal.App.3d     286     (1990)             . . . . . . . . . . . . . .         32, 33
Boehm v. Superior Court, 178
     Cal.App.3d 494 (1986)      .......    12, 17-18, 41, 45, 46
Cal. Emp. Stab. Corn. v. Chichester etc.
     co., 75   Cal.App.2d    899    (1946)                ..........           .   .      34
City and County of San Francisco v.
     Superior Court, 57 Cal.App.3d 44
     (1976)......................                                              .   .      30
Coldwell Banker & Co. v. Department of
     Insurance, 102 Cal.App.3d 381
      (1980)......................                                             .   .      18
Colson v. Hilton Hotels Corporation, 59
     F.R.D.   324    (N.D.   Ill.   1972)                 ...........          .   .      27
Committee to Defend Reproductive Rights
     V. Cory,   132 Cal.App.3d 852 (1982).                       .......       .   .      30
Doers v. Golden Gate Bridge Etc. Dist.,
     23    Cal.3d    1880    (1979)              . . . . . . . . . . . . . .   .   .      42
Edelman v. Jordan, 415 U.S. 651 (1974)                          ........       .   .      15
Employment Development Dept. v. Superior
     Court,    30   Cal.3d   256  (1981)                ...........            .       13-14
Feminist Women's Health Center v. Blythe,
     32 Cal.App.4th 1641 (1995). . . . . . . . . . . .                         .   .      46
Frink v. Prod, 31 Cal.3d 166 (1982). . .                         .......       . .       4-5
Gardner v. County of Los Angeles,
     34 Cal.App.4th 200 (1995)
      [Gardner .
      .               11         .   . . . . . . . . . . . . . . . . . .           passim



                                iv
Goldrich v. Natural Y Surgical
     Specialties, Inc., 25
     Cal.App.4th     772     (1994).                         . . . . . . . . . . . . . . .         44

Gonzales v. State of California, 68
     Cal.App.3d     621      (1977)                       . . . . . . . . . . . . . . . .          18

Green v. Obledo, 29 Cal.3d 126
     (1981)...................                                                    1, 11-12, 13

Greenhaw v. Lubbock County Beverage
     Ass'n, 721 F.2d 1019 (5th Cir.                           1983).               ........        27

Guimbellot v. Caulk, Sacramento
     Superior     Court    No.              530286                    ..............               20

Hypolite v. Carleson, 52 Cal.App.3d
     566     (1975).      . . . . . . . . . .   . . . . . . . .         13,           14,          15
IT Corp. v. County of Imperial, 35
     Cal.3d      63      (1983).                    . . . . . . . . . . . . . . . . . .             17

Kirkwood v. Bank of America, 43
     Cal.2d      333      (1954)                    . . . . . . . . . . . . . . . . . .             38

Kowis    v.     Howard,     3    Cal.4th    888          (1992).                  ..........        18
Landgraf v. US1 Film Products, 511
     U.S. 244, 114    S.Ct.    1483                   (1994)                 ...........           38
Leach v. Swoap, 35 Cal.App.3d 685
      (1973).             . . . . . . .     . . . . . . . . . . . .                   14, 16, 34

Lemon v. Kurtzman, 411 U.S. 192 (1973)                                    .........             40, 41

Lowry     v.    Obledo,      111     Cal.App.3d           (1980)              l   .........         16

Mandel     v.    Myers,     29     Cal.3d   531         (1981).                ..........           28
Market St. Ry. Co. v. Railroad Commission,
     28    Cal.Zd    363     (1946).     . .                      . . . . . . . . . . . . . .      27
Mendly v. County of Los Angeles, 23
     Cal.App.lth    1193    (1994)                   . . . . . . . . . .          5, 25, 29, 31
Mooney v. Pickett, 4 Cal.3d 669 (1971)
      [Mooney I]. . . . . . . . . . .  3, 12, 14, 15, 16, 30-33
Mooney v. Pickett, 26 Cal.App.3d 431
     (1972) [Mooney II]. . . . . . . . . . . . .                        12,         17-18,         45
                                                                                   Paues

Newman v. Emerson Radio Corp., 48
     Cal.3d      976     (1989)            . . . . . . . . . . . . . . . . .       35-36
New York v. Cathedral Academy, 434 U.S.
     125         (1977).         . . . . . .    . . . . . . ; . . . . . . . .         41

Oberlander v. County of Contra Costa,
     11    Cal.App.4th   535    (1992)              . . . . . . . . . . . .    20, 37
Pennsylvania v. Wheeling and Belmont
     Bridge Co., 59 U.S. (18 How.) 421
      (1856)........................                                                 36
People v. Cuevas, 111 Cal.App.3d 189
      (1980)........................ 3 5
People v. Guerra, 37 Cal.3d 385 (1984) . . . . . . . .                          39, 40

Phipps v. Saddleback Valley Unified
     School Dist., 204 Cal.App.3d
     1110         (1988)         . . .   . . . . . . . . . . . . . . . . . .         47
Reyes v. Board of Supervisors, 196
     Cal.App.3d     1263     (1987).              . . . . . . . . . . . . .        5, 12
Robbins v. Superior Court, 38 Cal.3d
      199       (1985).         . . . .    . . . . . . . . . . . . . . . . .         26
Rogers v. Bill & Vince's, Inc., 219
     Cal.App.2d     322      (1963)              . . . . . . . . . . . . . . . .      18
Rosack v. Volvo of America Corp., 131
     Cal.App.3d 741 (1982) . . . . . . . . . . . . . . . .                            29
Rothstein v. Wyman, 467 F.2d 226
     (2d       Cir.      1972).              . . . . . . . . . . . . . . . . . . 14-15

San Diego Union v. City Council, 146
     Cal.App.3d     947      (1983)              . . . . . . . . . . . . . . . .      46
Schubert    v.   Davis,   30   Cal.Zd    785      (1947).            .........        43
Shamblin v. Brattain, 44 Cal.3d 474
      (1988)........................                                                 17
Singleton v. Perry, 45 Cal.2d 489
     (1955)........................ 4 2
State of California v. Levi Strauss
     & co., 41   Cal.3d   460   (1986)              .        ............             27

                                  vi
  Steven W. v. Matthew S., 33
       Cal.App.4th     1108       (1995)             . . . . . . . . . . . . . . .         42
  Stockton Theatres, Inc. v. Palermo,
       121     Cal.App.Zd    616    (1953)               . . . . . . . . . . . . . .       19
  System Federation v. Wright, 364
       U.S.      642       (1961)           . . . . . . . . . . . . . . . . . . .          36
  Taylor v. County of Contra Costa,
       48   Cal.App.4th     1709    (1996).                 . . . . . . . . . . . . .      48
  Tripp v. Swoap, 17   Cal.3d    671    (1976)           .......         4-5, 45, 46
- Washington v. Board of Supervisors,
        19   Cal.App.4th   981    (1993)              . . . . . . . . . . . .        32, 33
  W.F. Hayward Co. v. Transamerica Ins. Co.,
       16    Cal.App.4th    1101    (1993).                  . . . . . . . . . . . . .      44
  Woosley v. State of California,
       3 Cal.4th 758 (1992). . . . . . . . . . . . . . . . .                                39


                           CONSTITUTIONS
  California Constitution
       Article    IV,     Section        8(c)(l)               .............                22

                                STATUTES
  Civil Code
       Section         3287.            . . . . . . . . . . . . . . . . . .          45, 46
  &de of Civil Procedure
      Section 128(f). ...............    3, 29, 31
      Section 437c(g) ................... 44
      Section 904.1(a). ................... 11
  Evidence Code
       Section 452(g). . . . . . . . . . . . . . . . . . . .                                29

  Government Code
       Section        905(e).              . . . . . . . . . . . . . . . . . .           43-44
       Sections   910,   et   seq.         .       .       ..............                   43
  Welfare and Institutions Code
       Section 17000 ....................              5
       Section 17000.5 ........ 3, 5-6, 7, 20, 31, 33-39
       Section 17000.6 ..........                    4, 21, 22, 23, 31, 39
                                  vii
                                                                                    Pases

    Stats. 1992,ch.163 . . . . . . . . . . . . . . . . . . .                           31
    Stats. 1993, ch. 72.   ...................                                         22
    S.B. 681, Stats. 1996, ch. 6   ......          3, 31, 34-37, 47, 48
    Stats. 1996, ch. 206   .................                                    31, 38

                                   TEXTS
    CEB, California Civil Appellate Practice,
         Vol. 1,    219    (3d   ed.    1996)           ..............                 17
-   3 Witkin, California Procedure, Section
         449     (3d     ed.     1985)        . . . . . . . . . . . . . . . . . .      42




                                   viii
               INTRODUCTION AND SDWMARY   OF ARGUMENT

     For more than 50 years, California courts "have viewed the
obligation of a governmental entity to pay welfare benefits
pursuant to law as a debt due to the recipient as of the date
he first became entitled to them.'! Green v. Obledo, 29 Cal.3d
126, 141 (1981), citing, inter alia,      Bd. of Sot. Welfare v.
County of L.A., 27 Cal.2d 81, 86 (1945).            .

     Following this unbroken line of cases, the trial court
ordered the County of Los Angeles to pay retroactive benefits
to General Assistance (GA) recipients whose grants the County
had reduced pursuant to a policy this Court held illegal in
Gardner v. Countv of Los Anueles, 34 Cal.App.4th 200 (1995)
[Gardner I].    The trial court granted summary judgment after
applying the law of the case set forth in Gardner I to a few
undisputed facts concerning the existence and duration of the
policy at issue.
     In Section     I of this brief,       plaintiffs/respondents
(plaintiffs) will demonstrate that this straightforward
approach was entirely proper.    The trial court had no choice
but to follow the Bd. of Sot. Welfare rule commanding repayment
of public assistance benefits illegally       withheld.   The only
equitable exception that has ever been recognized gives a trial
court flexibility to choose the starting date for eligibility
for benefits when awarding retroactive benefits in a class
action.   In this case, where the starting date has never been
an issue, an award of retroactive benefits was mandatory.
     Even assuming, for the sake of argument, that a case could
be   imagined in     which awarding   back benefits would be
1




    T




        inequitable, this is not such a case (§I1 infra). The County's
        reliance     on the trial court's       denial of a preliminary
        injunction would not justify refusal to award retroactive
        benefits.     Restitution to a prevailing appellant is the rule,
        both in public benefits cases and in California law generally;
        parties who are successful in the trial court are held to
        assume the risk   that   there might be a successful appeal. Here,
        in particular,     the County had advance warning of a legal
        challenge to its actions and knew that the only other county
        which had shared its view of the law had been successfully
        sued.
                By the same token, the County's complaint that had it
        known it would lose Gardner I it would have sought and obtained
        relief from the Commission on State Mandates much earlier
        presents    no equitable concerns.       Equity does not compel
        depriving desperately poor people of retroactive benefits on
        the grounds of an administrative decision that might have been
        made had there been an application.
                Section III will show that the County's claim it cannot
        afford to pay the judgment is premature at best.   Despite the
        County's repeated reference to a "$166 millionP1 judgment, the
        trial court refused to assess liability at that amount and
        refused to consider alternative uses for unclaimed funds; the
        judgment merely sets up a notice and claims procedure for
        retroactive benefits.     Nobody knows what the County's exposure
        might be.    If the history of class action monetary recoveries
        is any guide, the County might only have to pay a very small
        fraction--perhaps as low as 3%--of its maximum liability.
                                         -2-
Moreover, Code of Civil Procedure $128(f) provides the County
with an adequate post-judgment remedy by permitting a county
to allege lack of resources as a defense to a contempt
proceeding.    There is no need to consider such a defense now.
     In addition, the fiscal argument is precluded by Moonev v.
Pickett, 4 Cal.3d 669, 680 (1971), in which the Supreme Court
held that fiscal considerations may not justify an illegal GA
policy, and that it is the role of the Legislature to rewrite
California     welfare   law.       Post-Mooney   legislation   has
substantially altered the GA statutory framework to give
counties considerable fiscal flexibility, but the Legislature
has never given counties carte blanche to refuse to pay
retroactive benefits.
     In SIV,     plaintiffs     will dispose of   three purported
statutory reasons for refusing to pay back benefits.        First,
the County argues that since Welfare' and Institutions Code
517000.51 permits counties to pay some or all of their GA
grants in-kind rather than in cash, the County should not be
required to pay retroactive benefits in cash.      At all relevant
times, however, the County grant has been virtually all cash,
making repayment in cash appropriate.
     Second, the County points to the recent enactment of S.B.
681 (Stats. 1996, ch. 6), which, effective January 1, 1997,           ‘.

permits counties to reduce grants by $40 (less than the amount
involved in this case) to account for health care.       The trial
court appropriately held that S.B. 681was not intended to have

     'Unless otherwise indicated, all statutory references in
this memorandum will be the Welfare and Institutions Code.
                                  -30
retroactive effect in this case.
     Third, the County relies on its successful application,
under §17000.6, to reduce its cash grant effective March 1,


           nothing in the language of
           S17000.6




to this case.   Retroactive application of judicial decisions is
the rule in California, particularly where, as here, a decision
merely    construes a    statute differently from   one   superior
court.


                         c o n t e n t i o n t h a t r e t r o a c t
benefits cannot be recovered when not asked for in a complaint.
Retroactive benefits could not have been requested at the
outset of this case, in which plaintiffs filed suit before any
harm had occurred.       Any claim that plaintiffs should have
amended their complaint to seek back benefits was waived by the


addition, the rule is settled
as here,    the relief is consistent with the complaint and
evidence, even when the relief is greater or different than          .

sought in the complaint.
     V I I ,        p l a i n t i f f s        w i l l


                Tripn       v    .    Swoan,                Cal.3d
(1976),                 Frink
                        overruled on other grounds,
                                -4-
.
        .
    <



            31 Cal.3d 166 (1982), has held that prejudgment interest is
            appropriate in public benefits cases such as this in which the
            benefits owed can be easily calculated.
                 Finally, the trial court did not abuse its discretion in
            issuing a permanent injunction that prohibited the reduction of
            GA grants to account for      health care costs pending the
            effective date of partially superseding legislation.       SVIII

            infra.    This narrowly tailored injunction was more than
            justified by the County's refusal to budge its position
            throughout the litigation.
                            STATEMENT OF FACTS AND TEE CASE
                 A.    The GA Program.
                 To m e e t      i t s              S17000 o "relieve d e r
                                           o b l i g a t i to n   u n and
            supportVV its indigent residents, the County operates a GA cash
            assistance program.Unemployed and disabled people who qualify
            f o r
                GA2   in Los Angeles and other counties        "are utterly
            desperate and impoverished, dependent as a last resort upon the
            County grant for the rudimentary necessities of life."     Reves
            v. Board of Suoervisors, 196 Cal.App.3d 1263, 1279 (1987). In
            1991, the County's grant stood at $341 per month for a single
            person.   Mendlv v. Countv of Los Anueles, 23 Cal.App.4th 1193,
            1202 (1994).
                 B.    The County's Illegal Grant Reductions and Plaint.iffs'
                       Attempt to      Them.
                 The enactment of S17000.5in 1991 permitted the County to
                                                            Section



                    s   G e n e r a     R
                 2aGA is sometimes lknown e l i e f / o r      G R .
                                           -5-
subsistence needs so long as a county adopts @'a general
assistance standard of aid, including the value of in-kind aid"
equivalent to Aid to Families with Dependent Children (AFDC)
grants.       Gardner I,    34 Cal.App.4th at 219-20.     Under the
S17000.5 formula, the County was permitted to reduce the GA to
$285 in cash plus a          $9 per month clothing allowance in
September of 1993.      34 Cal.App.4th at 206.
      Dissatisfied with that reduction, however, the County's
Chief Administrative Officer (CAO) proposed a further $73 cut.
The CA0 sought to justify that reduction by subtracting, for
the first time in County history, the value of health care from
the GA cash grant. III J.A. 684-96.
      Upon learning        of this proposal,   plaintiffs' counsel
immediately wrote to each County Supervisor, warning that the
proposed reductions were illegal, and threatening suit. V J.A.
938-39.       In addition to presenting some of the same legal
arguments later adopted by this Court in Gardner I, plaintiffs
pointed out that only one other county had interpreted S17000.5
to include health care, and that county had been successfully
sued. Id.
      c.      Gardner I and Initial Proceedings on Remand.
      Despite these warnings, the Board of Supervisors voted to
slash the GA cash grant to $212 per month effective September
1,   1993.     Gardner I, 34 Cal.App.rlth at 206-07.      Plaintiffs
filed suit in August to challenge the GA grant reductions, and
sought a preliminary injunction.        The trial court (Judge Diane
Wayne)       refused to grant    the injunction,     permitting the
reductions to go into effect as scheduled.         Id. at 207.
                                  -6-
      On April 25, 1995, this Court reversed, and ordered that
a preliminary injunction be entered.             After thoroughly
analyzing the language and legislative history of S17000.5,
California's statutory scheme for funding health and welfare
and the County's own past practices, the Court concluded:
      When the County proposes such a substantial change
      in the status quo, one which will have such a
      significant adverse impact on so many people, it is
      not unreasonable for the courts to insist that there
      be clear legislati.ve authority in the statute upon
      which the County purports to rely.
Id.   at 227.   Finding no such legislative mandate, the Court
held that §17000.5 did not permit the independent health care
obligation to be deducted from the GA cash grant.     The County's
petition for review was denied on July 13, 1995.
      On remand, the parties agreed to a stipulated preliminary
injunction, which was issued August 8, 1995.3 Under the terms
of that injunction,    the $73 subtracted from the grant was
restored effective September 1,       1995.     Also pursuant to
stipulation, the trial court on October 5, 1995 certified a
class consisting of "all Los Angeles County General Relief
recipients from September 1, 1993."     I J.A. 198.
      D.   Bummary Judgment Proceedings and this Appeal.
      After unsuccessfully attempting to resolve the remaining
issues out of court,4 plaintiffs moved for summary judgment and
for entry of judgment.    III J.A. 711.       Plaintiffs contended

     3 Joint Appendix in Lieu of Clerk's Transcript, Volume      I
at 4 (I J.A. 4).
     4 See Electronic Recording Monitor's Transcript on Appeal
at 3, lines 14-23 (R.T. 3:14-23) (defense counsel, on December
12, 1995 reporting to the trial court that County was
considering settlement overture).
                              -7-
that since this Court had already resolved the only legal issue
on the merits--the illegality of the County's grant reductions
--the only factual issues concerned the length of time the
policy had been in effect.          IV J.A. 733-34.     These issues,
plaintiffs submitted, were undisputed.           Plaintiffs' Separate
Statement of Undisputed Facts, III J.A. 707-10.            Plaintiffs
asked the trial court to issue declaratory relief and a
permanent    injunction;     and    to order    the County       to pay
retroactive benefits to all class members who had suffered the
illegal reductions during the two years the illegal policy had
been in effect.       [Proposed] Judgment, 991-3, IV J.A. 756.
Plaintiffs also requested          the Court to declare that the
County's aggregate liability to the plaintiff class was $166
million, and to consider, after retroactive benefits were paid,
whether a    IIcy pres"    remedy --or alternative uses--might be
appropriate for unclaimed funds. Id., ij[15-16, IV J.A. 759-60.
     The County's opposition papers, while questioning the
legal significance of much of plaintiffs' Separate Statement,
did not dispute any of the claimed undisputed facts.         County's
Separate Statement, etc., IV J.A. 800-08.         Instead, the County
submitted its own statement of facts, which consisted of: a
repeated notation that during the preliminary injunction and
appeal stage plaintiffs had not asked for the relief later                .

sought by the motion for summary judgment and entry of judgment
(IV J.A. 801004:17, 806:11-14); the County's characterization
of   this   Court's   rulings      (IV   J.A.   804:19-05:22);    legal
conclusions concerning County obligations and recently enacted
legislation (IV J.A. 806:22-07:23, 808:5-11); and a contention
that GA recipients, along with other indigents in the County,
received valuable aid from non-County sources (IV J.A. 808:13-
    5
21).
        The County's Separate Statement also contended:      "County
has insufficient resources to pay $166 million in retroactive
benefits" and IIAn order of retroactive benefits will have
disastrous effects on the County of Los Angeles."           IV J.A.
807:25 - 808:3.       The sole evidence produced in support of these
propositions was three paragraphs from a declaration by Sally
Reed, then the County's CAO. Reed Dec., ¶!6-8, IV J.A. 878-79.
The CAO, after stating her understanding that plaintiffs were
seeking an        order for a $166 million retroactive benefit
payment,       testified:   "The County does not have sufficient
resources to comply with such an order because 1995-96 revenues
have been allocated to existing departments and services."
Reed Dec., 18, IV J.A. 878-79 (emphasis added).         The CA0 did
not say that the County would be unable to pay a lesser amount
or that it would be impossible or impracticable for the County
to pay $166 million in a different fiscal.year.
            On April 24, 1996, the trial court (Judge Aviva Bobb)
issued an order granting summary judgment (V J.A. 946-48), and
judgment for plaintiffs (V J.A. 949-55). The judgment declared
that the County's policy at issue in this case was illegal (91,        .

V J.A. 951), a ruling the County does not contest in the body
of its opening brief.          Next,    the trial court permanently


        5
        Neither the County's memorandum opposing summary
judgment (IV J.A. 882-904) nor the opening brief on appeal
makes a legal argument based on this contention.
                                  -9-
.




    enjoined the County from reducing GA grants to reflect the cost
    of health care provided to the recipients 'lunless and until
    legislation goes into effect that expressly authorizes such
    reductions . . . .@I 82, J . A .   9 5 1 .
          Finally, the court ordered the County to pay retroactive
    benefits, including pre-judgment interest, to any class member
    whose GA grant had been illegally reduced between September 1,
    1993 and September 1, 1995.      i3, V J.A. 951.
    specified the method of calculating benefits owed (14, V J.A.
    952), and a procedure for attempting to locate and pay eligible
                        (l[l5-6, 14,J.A. 952-53, 954).
                                  V
         The trial court rejected other proposed provisions of the
    judgment.   The court deleted any requirement for the County to
    assist in a publicity campaign to locate class members, and
    rejected proposed procedural protections for class members
                         Judgment, V J.A. 952-54 (deleting proposed


         significantly for this appeal, the trial court struck
         Most
    Q& paragraph 15 of the proposed judgment, which would have
    specified that the County's aggregate liability was $166
    million,6   and paragraph 16,    which would have reserved the
    possibility of a *'cy pres" remedy for disposition of unclaimed
    benefits.    V J.A. 954-55.     Thus, the judgment does not make
    the County liable for $166 million, but rather orders the
    County to pay only those eligible members of the class who can
    be located without the assistance of a County publicity

     6 Plaintiffs voluntarily suggested this deletion at oral
argument. R.T. 47:7-8.
                                    -lO-
campaign.
      Notice of entry of judgment was served on May 1, 1996 (V
J.A. 968), the County's application for reconsideration was
denied on June 21 (V J.A.      1090-91) and the County filed a
timely notice of appeal on the same day.     V J.A. 1093.
                    STATEMENT OF APPEALABILITY
     The County's opening brief fails to include the statement
concerning appealability required by Rule 13 of the California
Rules of Court.    Nonetheless, the judgment finally disposed of
all issues between the parties and is therefore appealable.
Code Civ. Proc. 5904.1(a).


     I.      AN UNBROKEN LINE OF CALIFORNIA CASES HAS HELD TEAT
             PUBLIC ASSISTANCE RECIPIENTS WEOSE GRANTS ARE
             ILLEGALLY DENIED OR REDUCED ARE ENTITLED TO PAYMENT
             OF RETROACTIVE BENEFITS.
     The trial court,     in awarding retroactive benefits to
plaintiffs, was doing no more than following an unbroken line
of California cases beginning with Bd. of Sot. Welfare v.
County of L.A., 27 Cal.2d 81.     There, the California Supreme
Court held that when public assistance benefits are illegally
denied,
     [t)he obligation to pay became a debt due from the
     county to the applicant as of the date the latter
     was first entitled to receive the aid.          The           ,.
     bare fact that an applicant has by one'mbaxk or
     another managed to ward off starvation pending
     receipt of the payments to which he was previously
     entitled provides no sufficient excuse for a county
     to refuse to make such payments.
Id. at 06.
     The California Supreme Court has continued to follow the
rule announced in pd. of Sot. Welfare.      Green v. Obledo, 29
                               -ll-
.   i




             Cal.3d at 141 ('*Our courts have viewed the obligation of a
             governmental entity to pay welfare benefits pursuant to law as
             a debt due to the recipient as of the date he first became
             entitled to them.").
                    The Bd. of Sot. Welfare rule has been followed in GA
             cases.   In Boehm v. Suoerior Court, 178 Cal.App.3d 494 (1986),
             just as here,     the plaintiffs were     denied a preliminary

             injunction seeking to stop GA grant reductions, but ultimately
        -   prevailed in the appellate courts.      The Court of Appeal held

             that
                    the County's obligation to provide benefits at the
                    level before the unlawful reduction created an
                    indebtedness due petitioners as of the date they
                    were entitled to those benefits. . . , GA recipients
                    are therefore entitled to receive retroactive
                    payments in the amount of the difference between
                    their GA entitlement before the unlawful reduction
                    .  .  .  and the amount actually received, plus
                    prejudgment interest, attorney's fees and costs.
             Id. at 503-04 (citations omitted).    See also Reves v. Board of
             Sunervisors, 196 Cal.App.3d at 1280 (refusal to certify a class
             of GA recipients for purposes of retroactive relief "denies a
             potentially substantial class the barest of necessitiesVV);
             Moonev v. Pickett, 26 Cal.App.3d 431, 434-36 (1972) [Mooney II]
              (plaintiff who was illegally denied GA was entitled to benefits
             calculated from the date of his original application rather
             than from the date he was finally-granted assistance).'
                    The County has not cited a single California case in which

                  ' The County attempts to distinguish this case from Mooney
             by asserting that the only mistake the County made here "was
             one of statutory interpretation . . . n AOB at 22. In Boonev
             also, the Supreme Court based ilx ruling on the language and
             legislative history of several GA statutes. poonev I, 4 Cal.3d
             at 675-80.
                                            -12-
a public assistance recipient whose benefits were illegally
reduced has ever been denied retroactive benefits.




     Cal.3d      1    2
     The County cites Green 6 Obledo, 29
                            v.  ,                      a      n      d
Hvoolite v.   Carleson,      52 Cal.App.3d 566     (1975)*    for the

proposition that retroactive benefits may be denied altogether
in class actions under equitable principles.               AOB at 30.

Neither opinion supports such a sweeping argument.           In Green,

the Court held that retroactive payments should be paid to
restore any AFDC benefits unlawfully withheld from the named
plaintiffs during the three-year statute of limitations period
preceding the filing of the complaint.            29 Cal.3d at 141.

Under some circumstances, the Court recognized, it might be
inequitable to pay retroactive benefits to a class "if such
benefits   were    ordered    paid   for    the   entire period of

limitations." Id. at 142. On a proper showing, a trial court
"has discretion to fix a more realistic starting date for t.he
payment of retroactive benefits to class members." Id.
     The   Green   court     cited   with   approval   JWnolite, 52
Cal.App.3d at 585, n.14, in which retroactive benefits to a              "

class were paid back to the filing of the complaint rather than
for a period that might have extended 20 years.                Accord,
molovment Develomment DeDt. v. SuDerior Court, 30 Cal.3d 256,
266 (1981) (approving certification of a class to &cure
retroactive benefits in an unemployment insurance case while
                                 -13-
stating that the trial court had flexibility in determining the
starting date for payment).        While each of these opinions
supports     flexibility in    choosing a    starting       date   for

retroactive benefit payments, none holds or even intimates that
retroactive benefits may be totally denied.
        In this case, the starting date for payment of retroactive
benefits is not an issue since plaintiffs filed suit before the
illegal policy was scheduled to go into effect.         Similar to

Hvoolite,    52 Cal.App.3d at 585, n.14, where payments were
ordered for a period beginning with the filing of the
complaint,     the trial court ordered payments back to the
effective date of the County's illegal policy--September 1,
1993-- a few weeks after the filing of the complaint.       Judgment,

93, V J.A. 963.     The County did not suggest any other starting
date.
        Next, the County cites Mooney I, 4 Cal.3d at 683, for the
proposition that "retroactive payment of.benefits may not be
automatically ordered without proper findings of factll. AOB at
18.     In Moonev I, the Supreme Court struck,down a county policy
denying GA benefits to employable adults.          The high court

refused to order automatic payment of GA to the prevailing
petitioner because he had not yet proved he would be eligible
for GA were it not for the invalidated policy.          4    Cal.3d      at   ’

6 8 3By contrast, in e
     c.   a     s    our        , the County's illegal policy was
applied to GA recioientswho, by definition, had already been
found eligible for these benefits.
        Finally, the County mistakenly relies upon Bothstein V.

WYman, .467                          1972), Cir.
                               F.2d 226 (2d in which the court,
                                 -14-
invoking Eleventh Amendment and federalism principles, reversed
a judgment awarding retroactive benefits in an AFDC case.@ AOB
at 30,      32-33.    California courts, however, have expressly
declined to follow Rothstein.         In Hvoolite v. Carleson, 52

Cal.App.3d at 584-85, the court, affirming a retroactive
benefits award, stated that the "principles of 'equity, comity,
and federalism' held to be controlling in Rothstein                . . . do

IId   inhibit a California court in the        present case; nor does

the Eleventh Amendment have any application."
      Similarly, in Leach v. Swoan, 35 Cal.App.3d 685 (1973),
the court affirmed a judgment for retroactive benefits in a
public      assistance case.     The Court of Appeal noted that
Rothstein expressly recognized the power of state courts to
make their own policy on retroactive benefits.            Id.   at 692.

The Leach court concluded, "the Supreme Court in Bd. of Sot.
Welfare, sunra, 27 Cal.2d 81, effectively answered the equity
arguments set forth in Rothstein.        Conversely, Rothstein did
not meet the debt theory propounded by our Supreme Court in &
of sot.      Welfare and expanded upon in Moonev."          Leach, 35

Cal.App.3d at 692 (emphasis in original).
       In    short,    under   controlling   California    case     law,

retroactive benefits are mandatory in cases where public
assistance benefits have been illegally withheld.          Since      there   ’

was no dispute that the grant reductions at issue were in


     8 Though Rothstein discussed a number of considerations,
the Eleventh Amendment was sufficient to decide the case, as
the United States Supreme Court later held. Edelman v. Jordan,
415 U.S. 651 (1974) (Eleventh Amendment bars retroactive
benefits awards against a state in federal court).
                                  -15-
7




    effect between September 1, 1993 and September 1, 1995, and
    Gardner I established the illegality of those reductions, the
    trial court had no choice but to award retroactive benefits.
         The County, nonetheless, asserts a plethora of lengthy
    arguments on tangential issues, some of them raised for the
    first time on appeal and few of them grounded on the actual
    language of      relevant   statutes or         applicable   case   law.

    Plaintiffs will respond to each            of these      arguments in

    succeeding sections, but ask the Court to keep in mind that in
    the final analysis all the trial court did was to apply the
    undisputed law of the case to undisputed facts,               and order

    relief consistent with 50 years of controlling precedent.
         II.   EVEN IF THERE WERE AN EQUITABLE EXCEPTION TO TEE
               RULE REQUIRING PAYMENT OF RETROACTIVE BENEFITS, THE
               TRIAL COURT DID NOT ABUSE ITS DISCRETION IN REFUSING
               TO APPLY SUCH AN EXCEPTION TO THIS CASE

         As shown above, an order to pay retroactive benefits is no
    more subject to a case-by-case analysis of whether payment
    would be equitable than would be a personal injury judgment or
    a back pay order against a government employer.              As noted in
    Leach v. Swoap, 35 Cal.App.3d at 692, the Supreme Court in &
    of sot. Welfare has already answered the equitable arguments.
    #e, e.u., Lowry v. Obledo, 111 Cal.App.3d 14, 24 (1980)
    (failure to grant writ of mandate compelling defendants to
    recalculate class members' past grants was reversible error
    under Mooney).
         Assume,     however,   for   the    sake    of   argument,     that   an
    equitable exception to Bd.         of sot.      Welfare theoretically
    exists.    Even then, the County's arguments based on equity

                                      -16-
.   i




         still must fail.
              To begin with, the County faces a difficult standard of
         review.     "Remedies that require the trial judge to weigh
         equities are commonly discretionary."    Continuing Education of
        the Bar, California Civil Anoellate Practice, Vol. 1, f5.24 at
         219 (3d ed. 1996).     Thus, just as in the grant or denial of a
        preliminary injunction,      a trial court order lI1may not be
        interfered with on appeal, except for an abuse of discretion."'
        IT Corn. v.      County of Imnerial,    35 Cal.3d 63,    69 (1983)
         (citations omitted).
              "The appropriate test for abuse of discretion is whether
        the trial court exceeded the bounds of reason."         Shamblin v.
        Brattain, 44 Cal.3d 474, 478 (1988).     "[Ulnless a clear case of
        abuse is shown and unless there has been a miscarriage of
        justice a reviewing court will not substitute its opinion and
        thereby divest the trial court of its discretionary power.ll
        Blank v. Kirwan, 39 Cal.3d 311,        331 (1985) (citations and
        internal quotation marks omitted).       The County's three main
        equitable arguments do not demonstrate an abuse of discretion.
                    A.   The Countv is not Entitled to Relv Upon its
                         Victorv in the Trial Court to Avoid its
                         Oblicration to Pav Retroactive Benefits .
             The County repeatedly argues that requiring payment of
        retroactive benefits is unfair because the County was entitled
        to rely upon the trial court's denial of a preliminary
        injunction and this Court's summary denial of plaintiffs' writ
        petition.   AOB at 3, 16, 24-25, 37.
             The County's initial judicial victories do not distinguish
        this case from Boehm or from Mooney II.        In each case, the
                                       -17-
 plaintiffs had initially lost in the trial court.      Boehm, 178
 Cal.App.3d at 497 (trial court twice denied the plaintiffs'
motions for preliminary relief); Moonev II, 26 Cal.App.3d at
433 (trial court denied writ of mandate).      Yet, in each case,
retroactive benefits were awarded.      Boehm, 178 Cal.App.3d at
503-04; Moonev II, 26 Cal.App.3d at 434-36.'
        In effect, the County is arguing that preliminary judicial
victories create an estoppel of sorts.       This argument is not
only inconsistent with the results in Boehm and Moonev II, but
also flies in the face of California law governing           post-

reversal restitution.    As explained in Coldwell Banker & Co. v.
Deoartment of Insurance, 102 Cal.App.3d 381, 400 (1980)       I   '@a
reversal of the trial court's judgment requires that the
parties be returned as close as possible to that position they
occupied prior to the rendering of the erroneous judgment."
(Emphasis in original.)      See also Roaers v. Bill & Vince's,
Inc.,    219 Cal.App.2d 322,   324 (1963) (the trial court has
inherent power to order post-reversal restitution,         "which
normally is the right of the party who secured reversal");
_’
Gonzales v. State of California, 68 Cal.App.3d 621, 628 (1977)
("The doctrine of unjust enrichment is applied in cases where
a party is entitled to restoration of benefits lost by virtue
of an erroneous judgment.").
        The courts have never recognized a right to rely upon a

     g The additional element in this case--that the Court of
Appeal summarily denied an extraordinary writ petition--adds
nothing to the County's argument. The County should have known
that a denial of a writ of mandate without an opinion has no
binding effect, even when the denial includes a case citation.
powis v. Howard, 3 Cal.4th 888, 891, 892 (1992).
                               -18-
preliminary victory , even a judgment, that has been reversed on
appeal.     For example, in Stockton Theatres, Inc. v. Palermo,
121 Cal.App.Zd 616 (1953), a landlord obtained two judgments
against his tenant--a theater company--declaring a lease
invalid and obtaining possession of the theater.           While the
judgments were on appeal, the landlord began to operate the
theater.    The judgments were both reversed, and the tenant sued
for an accounting and for restitution of profits enjoyed by the
landlord while the case was on appeal.
     The trial court ruled for the tenant, and the Court of
Appeal     affirmed.     The appellate court reasoned that the
landlord
     was guilty of no wrongdoing in seeking to acquire
     the fruits of the judgments he had obtained, yet he
     knew those judgments were not final          he knew
     that if the appeal was successful'he 'would be
     subject to a demand by the theatre company that he
     account for all that he had received through his
     enforcement of the questioned judgments.      We see
     nothing unjust in the court's holding him to such an
     accounting.
Td. at 622.
     In this case, as in Stockton Theatres, the County "'knew
that an appeal was pending.             It took the risk, and went
ahead.'"      Id.   (citation omitted).    The County has no grounds
for claiming injustice.
     Even if one could imagine a case in which the sheer
unlikelihood of losing an appeal presented             an equitable
defense, this is not such a.case.         The County's claim that it
"had no notice at any time prior to this Court's decision on
appeal that the medical care credit was not valid" (AOB at 3)
conveniently ignores the following:
                                 -19-
        (1)    Plaintiffs. expressly warned the County about the
illegality of the grant reductions before they were enacted.
V J.A. 938-39 (letter to Board of Supervisors).
        (2) Section 17000.5 was enacted in 1991 and amended in
1992.     Gardner I, 34 Cal.App.4th at 205-06.       Until the Spring
of 1995, a few weeks before this Court's opinion in Gardner I
was due, no other county in California had reduced its GA grant
to take health care into account.10
        (3)   The only other county that had tried to lump GA and
health care together (in that case, for purposes of determining
health care eligibility), had been sued, and a trial court had
declared this policy to be illegal.              Guimbellot v. Caulk,
Sacramento Super. Ct. No. 530286, Order, filed Feb. 19, 1993,
III J.A. 697-703, appeal and writ pending.
        (4)   While the trial court in this case denied plaintiffs'
motion for preliminary injunction based on its erroneous view
that the case was controlled by Oberlander v. County of Contra
Costa, 11 Cal.App.4th 535 (1992), the lower court also stated
that    Oberlander    was   wrongly   decided,     found   plaintiffs'
arguments on the merits llcompelling" and found that the balance
of equities favored plaintiffs. Gardner I, 34 Cal.App.4th at
207, n.7, 208; V 1st J.A. 1116-18.


     lo Plaintiffs recognize the difficulty of proving a
negative. Nonetheless, we have repeatedly asserted that the
County acted alone in reducing GA by the value of health care
(First Joint Appendix in Lieu of Clerk's Transcript, Vol. I at
34 [I 1st J.A. 343; IV J.A. 747; V J.A. 939), and the County
has never refuted the assertion. Within a several week period
before Gardner I was due, three counties enacted a GA grant
reduction similar to the County's.        Dec. of Richard A.
Rothschild [in attorneys ' fees proceedings], 112, I J.A. 112.
      This Court's decision in Gardner I was not a bolt out of
 the blue.        The County has no "reliance" argument.
      In a possibly related vein, the County repeatedly laments
that plaintiffs failed to expedite the appeal in Gardner I.
AOB at 3, 8, 16.          The legal significance of this charge is
unclear,     and the allegation is untrue.        Plaintiffs sought
extraordinary writ relief just six days after the order denying
preliminary relief was issued.           V 1st J.A. 1141.   When the
petition was summarily denied (V 1st J.A. 1206), plaintiffs
concluded that the Court intended to hear their appeal in the
ordinary course of business.
     If the County believes it was somehow prejudiced by the
normal course of appellate procedure,          one wonders why the
County sought summary denial of plaintiffs' writ petition ( V
1st J.A. 1203) rather than granting of an alternative writ and
prompt rejection of the petition on its merits; and did not
itself seek to expedite the appeal.        The answer, of course, is
that the County has benefited from delay.       During each month in
which the County's policy remained in effect the County saved
$6.92 million (III J.A. 685), and hundreds or perhaps thousands
of eligible class members have left the GA rolls without
forwarding addresses.         The County cannot now claim it was
prejudiced by delay.
             B.      yhe Countv's Failure to Hake an Earlier
                     mDlication for Relief Under S17000.6 is
                     rrrelevant to These Prooeedinus.
     In a similar vein, the County contends that had it known
it would lose Gardner I it would have applied much earlier to
the Commission on State Mandates under S17000.6 for permission

                                  -21-
to reduce its GA cash grants to $212 per month, as the County
later did.       AOB at 6-7.   But nothing prevented the County from
making an earlier application other than its reliance on its
preliminary victories in court.           As discussed above, such
unjustifiable reliance cannot defeat a judgment for retroactive
benefits.
     As a factual matter,          it is unclear that an earlier
application to the Mandates Commission would have benefitted
the County to the extent claimed.             The County began to
implement the policy at issue in this case on September 1, 1993
(Gardner I, 34 Cal.App.4th at 207), whereas S17000.6 did not go
into effect until January 1, 1994.        Stats. 1993, ch. 72; Cal.
Const. Art. IV, SS(c)(l).
     Equally important, it would have taken some time for the
County to put together its application to the Commission and
for the Commission to act on it, as later events have shown.
Gardner I was decided on April 25, 1995, which presumably gave
even the County notice that its policy was illegal.        Yet, the
County still did not file its application to the Commission
until Nov. 15, 1995 (IV J.A. 836), the application was not
approved until February 6, 1996 (ia.) and the grant reduction
did not go into effect until March 1, 1996 (Reed Dec., j[7, IV
J.A. 878), more than 10 months after Gardner I.        It is not at
all clear that an earlier application under S17000.6 to reduce
grants would have been in effect for most of the retroactive
benefit period.
     Nor    is    it   a foregone conclusion that an earlier


                                  -22-
application would have been approved,ll notwithstanding the
County's contention that its continuing deficits "transcend any
period of time            . . . .I’   AOB at 16.      There is no such thing as
a sure thing.            It would be the height of unfairness to deny
benefits to needy indigents on the grounds of an administrative
decision that might have been made had there been an
application.
                   c.   The Trial Court was not Recruired to Rebalance
                        the Harms in Favor of the County.
            The County suggests that the balance of harms militates
against an award of retroactive benefits,                        contending that
plaintiffs have           "no compelling need for retroactive benefits
.   .   .   II   AOB at 33.     This argument was answered in Bd. of Sot.
Welfare, 27 Cal.2d at 86:                "The bare   fact   that an applicant has
by one means or another managed to ward off starvation pending
receipt of the payments to which he was previously entitled
provides no sufficient excuse for a county to refuse to make
such payments." The Court flatly rejected Los Angeles County's
claim that an express finding of current need is required,
reasoning that even indigents who managed to survive an illegal
denial of benefits "by the bounty of friends and neighbors"
would need the retroactive benefits to "repay such advances.@@
Id.
            The County's attempt to belittle the harms caused by its


            11
         Contrary to the County's assertion (AOB         at    7),
plaintiffs never conceded the County's entitlement to S17000.6
relief. The paragraph cited by the County from the complaint
merely described S17000.6, and did not address whether the
County qualified for relief under the statute. Complaint, 127,
I 1st J.A. 10-11.
illegal policy (AOB at 23) is no more than a rehash of its
arguments rejected by the trial court and this Court in Gardner
I. As this Court stated, the finding that the balance of harms
favored plaintiffs     "was plainly within the            trial court's

discretion, where the plaintiffs' declarations establish that
many will      be--and presumably by now have             been-- rendered
homeless by the cuts in cash grants which reduced the income of
many residents below their monthly rent        . . . VI    Gardner I, 34
Cal.App.4th at 208 (emphasis in original).     These harms should
be compensated even if it were true, as the County suggests,
that plaintiffs received additional health care.             AOB at 23.
       In fact, that suggestion is false.     Plaintiffs alreadv
were   receiving County    medical care under an             independent
statutory obligation before the $73 cash grant reduction was
implemented.     Gardner I, 34 Cal.App.4th at 225.         As this Court
noted, there was no evidence introduced in the preliminary
injunction proceeding that any recipient received more or
better services during the time the policy was in effect. Id.
at 224, n.22.      Nor was any such evidence introduced in the
summary judgment proceedings. GA recipients went to the same
County facilities for care before the challenged policy went
into effect as they did after the policy was implemented.             The
onlv effect of the County's illegal policy was to reduce cash
..
grants by $73 per month.     This places plaintiffs on precisely
the same footing as the plaintiffs in all the cases where
retroactive payments were awarded.      Contrary to the County's
argument,   payment of retroactive benefits would not be a
"windfalltV (AOB at 23), l2 but would compensate plaintiffs for
cash benefits illegally withheld.
     Nor is there any evidence to support the County's claim
that it saved no money from implementation of its illegal
policy.   AOB at 23-24.   The CA0 estimated that the policy would
save $6.92 million monthly "in net County cost." III J.A. 685
(emphasis added).    The CA0 did not estimate any corresponding
off-setting additional costs, and there is no evidence in the
record that there were any.
     In short, the trial court was not required to re-balance
the equities.     Even if that inquiry were relevant at this
stage, the balance of harms still favors plaintiffs.
     III. BECAUSE TEE AMOUNT OF TEE LIABILITY IMPOSED BY TEE
          JUDGMENT IS UNKNOWN AND TEE COUNTY HA8 AN ADEQUATE
          POST-B REMEDY, CONSIDERATION OF TEE COUNTY'S
          FISCAL IRPCSSIBILITY DEFENSE WOULD BE PREMATURE, AND
          SUCH A DEFENSE SHOULD NOT BE RECCGNIBED IN THE
          ABSENCE OF STATUTORY ADTEORITY.
     The County contends throughout its brief that because it
cannot afford to pay the judgment,        the judgment must be

reversed.    The argument is premature and inappropriately asks
this Court to engage in judicial legislation.
            A.   The Extent of the County's Fiscal Liability is
                 Far Less than $166 Million.

     The County's fiscal impossibility argument is premised on
the claim that the judgment "translates into an astonishing         '.

      l2 The term "windfall" conjures images of winning the
lottery and living the life of luxury. It is worth noting that
the County grant, even at its historical high of $341 per month
(Mendlv, 23 Cal.App.Qth at 1202), was a little less than 62% of
the 1991 federal poverty line. Gardner I, 34 Cal.App.lth at
219, n.19. To describe repaying a homeless person enough money
to pay first and last month's rent on an apartment as a
nwindfall@* deprives that word of all equitable content.
                                -25-
magnitude of $166 millionl'   (AOB at l), a figure the County
repeats in its brief no fewer than 11 times.    AOB at l-2, 13-
14, 15-16, 19-20, 38.    Repetition does nothing to enhance the
accuracy of the County's contention, however.
     To be sure, the County saved approximately $166 million
during the two-year period its illegal policy was in effect.13
As the trial court recognized, however, estimating a $166
million retroactive benefits recovery "assumes that every
eligible person is located" when in fact @'we don't know who --
who is going to apply for these benefits, who will be found,
who's still in the County."   R.T. 83:12-13, 83:6-8.
     Past history teaches that the actual payout might be a
very small fraction of $166 million.   In Sacramento County, for
example,    a GA class action agreement awarded $500 each to
persons who had been injured by the regulation invalidated in
Robbins v. Superior Court, 38 Cal.3d 199 (1985).    Even though
notices were sent to all eligible persons at their last known
addresses and posted in county welfare offices,        and the
plaintiffs' counsel sought to locate individual claimants, only
seven persons, or 3.25% of those eligible, claimed retroactive
benefits.    Dec. of Curtis L. Child [Robbins counsel], qq2-3,
III J.A. 866-67.
     Even outside the GA context, retroactive      recoveries      in   ’

class actions and similar suits often have been quite low.

     l3 The CAO, in recommending the illegal grant reductions
projected $6.92 million monthly savings. III J.A. 685. Over A
24-month period, that would amount to savings of $166,080,000.
Actual savings would depend on the size of the actual GA
caseload during each month of the two years the reduction was
in effect, which is not in the record.
                              -26-
.




    See, e.a., Market St. Rv. Co. v. Railroad Commission, 28 Cal.2d
    363, 366 (1946) (only $12,014.45 out of potential $705,794.96,
    or 1.7%, recovery of refunds for railway company overcharges);
    Greenhaw v. Lubbock Countv Beveraae Ass/n, 721 F.2d 1019, 1024
     (5th Cir. 1983) (though classwide damages in antitrust action
    were set at $927,078,            individual claimants documented only
    $5,827 in damages, or              .6%);     Colson v.    Hilton   Hotels
    Cornoration,        59 F.R.D. 324,     326 (N.D. Ill. 1972)        ($5.176
    million settlement; $18,980 in verified claims, or .3%)
         Not all class action recovery percentages are that low.
    In State of California v. Levi Strauss & Co., 41 Cal.3d 460,
    479 (1986),        between 20 and 40% of eligible class members
    claimed compensation in an antitrust action following a multi-
    million dollar publicity campaign by the Attorney General.
         In this case, however, the trial court refused to require
    a government-paid publicity campaign.          Judgment, VJ.A. 952-53.
    And, as County Counsel pointed out below, "the [GA] population
    is very -- very transient, so . . . you may not be able to get
    a hold of them, period."          R.T. 71:6-7, 71:9-10.
         Thus,    recovery could be a very small fraction of $166
    million.     As the trial court accurately concluded, "we don't
    know what the cost of applying it retroactivelv is.                   has
                                                                   Nobodv ----
                                                                   -----a


    any idea."        R.T. 83:1-2.
                 B.      consideration of a Pisoal      ImDOsSibilitv Defense
                         would be Premature at Best.
         Given the uncertainty of the monetary recovery,                  the
    County's tld0        factual     claims in    its   Separate   Statement
    concerning fiscal impossibility did not raise a triable issue

                                        -27-
.




    of material fact.         First, the County's contention that it would
    be unable to pay $166 million in retroactive benefits (IV J.A.
    807:25-28) did not raise a triable issue once the trial court
    refused to consider a cy pres remedy for unclaimed retroactive
    benefits.       V J.A. 954-55.      Whether the County could pay $166
    million is irrelevant since a much smaller amount will be
    required.
            The    County's     other     contention--that   "An    order of
    retroactive benefits will have disastrous effects on the County
    of Los Angeles"         (IV J.A. 808~1-3) --also failed to raise a
    triable issue of material fact.              The only evidence cited in
    support of the contention-- a portion of the CAO's declaration--
    addressed whether the County could pay $166 million.                  Reed
    Dec.,    l¶i6-8 I   IV J.A. 878-79.
            Moreover, the statement is ambiguous even if "would have
    disastrous effects" is construed to mean "impossible."              Surely
    the County cannot be alleging that it would be impossible to
    pay any judgment for retroactive benefits, no matter how small.
    If the County truly were unable to pay any of its debts, it
    would have no choice but to declare bankruptcy.                And for the
    County to pick and choose among outstanding judgments those it
    considers most worthy of paying and those it declares itself
    unable to pay would raise serious separation of powers and
    equal protection questions.            See pandel v. Myers, 29 Cal.3d
    531, 549 (1981) (Legislature's refusal to appropriate funds to
    pay a particular attorneys' fees judgment violated separation
    of powers clause).         The conclusion is inescapable that until we
    know approximately how much money is at stake, a trial
                                          -28-
concerning      the    County's      fiscal     capabilities   would    be
meaningless.
        This does not mean that the County is forever precluded
from asserting it lacks money to pay the judgment.                Code of
Civil Procedure §128(f) provides the County with an adequate
post-judgment remedy.          Under that statute, a county may not be
held in contempt unless the court finds either that the county
has resources necessary to comply with the order of the court,
or that the county has authority to generate additional
resources.
        Thus,   the    trial     court     appropriately   deferred    any
consideration of the County's ability to pay a retroactive
benefits award until after claims are submitted and the County
has determined the extent of its liability.14                  This will
prevent the courts from having to decide irrelevant issues, and
is consistent not only with Code of Civil Procedure 5128(f),
but also with the flexibility trial courts enjoy in managing
class    actions.      Rosack v.         Volvo of America Core.,       131
Cal.App.3d      741,   762      (1982)     (n'The   deferral of   damage

      l4 By acknowledging that the County may raise a defense
under Code of Civil Procedure Sl28 (f), we are by no means
conceding the validity of that defense.    A county which can
afford to increase pension benefits by $30-50 million in the
midst of a budget crisis is able to repay wrongfully withheld
subsistence benefits.     Wendlv v. Board of Sunervisors, 23
Cal.App.Qth at 1236, n.17 (Johnson, J., dissenting). Pursuant
to Evidence Code S452(g), plaintiffs ask the Court to take
judicial notice that the same County reportedly is able to pay
2,200 of its employees more than $90,000 per year, and to
purchase three luxury sedans for its sheriff and $466 toasters
for its jail inmates. Jeffrey L. Rabins 61 Timothy Williams,
"SALARIES: County Managers Among Highest Paid in Nation," L.A.
Times, Dec. 22, 1995 at 1; Erich Lichtblau 6t Josh Meyer,
"Sheriff's Budget is Not as Lean as Billed," L.A. Times, Nov.
3, 1996 at 1.
                                    -29-
computation until after liability has been established has thus
been recognized as an effective procedure by which to manage
class actions."' ) (Citation omitted.)                Cf. Committee to Defend
Reoroductive Riahts v. Corv, 132 Cal.App.3d 852, 859 (1982)
 (collection problems that might arise later from an attorneys'
fees award against a state agency did not prevent court from
issuing fee award order in the first instance).
             c.    There is No Judicially-Created Fiscal
                   ImDOSSibilitY Defense in GA Actions.
       Though the Court need not reach the issue, the County has
no right--other than in a contempt proceeding--to assert its
fiscal problems as a defense in a GA suit.                        Still valid
California Supreme Court decisions have rejected such a
defense,     and   more   recent         statutes,       while   exponentially
augmenting counties' ability to save GA costs, have not created
a pre-judgment fiscal impossibility defense.
       The assertion that a county lacks the ability to pay
state-mandated GA costs is not novel, either in this Court or
in the California Supreme Court.                In each case, '#the Supreme
Court considered.the plight of the taxpayers, but in each case
concluded that their burdens were not so grievous as to permit
indigents,    in the midst of plenty, to go hungry, cold and
naked, without fault        . . . ‘I.    Citv and County of San Francisco
V.   Superior Court, 57 Cal.App.3d 44, 47 (1976).
       In poonev I, the high court expressly rejected a county's
claim that it Wsimply cannot afford 'I to comply with the law.
The Court recognized the financial difficulties of counties,
but stated that the "court               ...   is   not fitted to write a new

                                        -3o-
.




    w e l f a r e        l a w      f o r     t h e        S and while the
                                                              t a t e   o f    C a l i f o r
    Legislature addresses itself to that task it remains our task
    to enforce the existing law."       Cal.3d
                                        4




    years.15
    reductions.16
         Moreover,
               d i f f i c u with
    problems of counties l t i e s .
    fiscal                                    Section           17000.6
    permits a county found to be in "significant financial
    distress" to        reduce GA    grants    for    up   to   36   months.

    §17000.6(a)-(b), as amended by Stats. 1996, ch. 206, s33.
    And, as noted, in 1992 the Legislature added subdivision (f) to
    Code of     Civil    Procedure Sl28, protecting counties with
    insufficient resources from contempt orders.           Stats. 1992, ch.

    163, S13.
          Not only do these statutes fail to undercut Moonev I, but
    they underscore the wisdom of that decision. The Legislature,
    not the judiciary, must be the branch that decides whether, and
    to what extent,       counties are to be made free of certain
    responsibilities under the law.          The Legislature has made the

         l5 The single person cash grant stood at $341 per month in
    1991. Mendlv v. County of Los Anaeles, 23 Cal.App.lth at 1202.
    Sections 17000.5 and 17000.6 have enabled the County to make
    drastic reductions in cash grants, the most recent to $212 per
    month. AOB at 12.
           l6 S.B. 681 (Stats. 1996, ch. 6) (permitting counties to
    limit employable GA recipients to three months per' year
    benefits, to make a reduction of up to $40 for health care, and
    to make percentage reductions for recipients sharing housing).
                                      -31-
    deliberate decision to permit all counties to reduce GA grants,
    to permit financially distressed counties to make even further
    reductions and to provide counties unable to comply with a
    court order a defense in a contempt proceeding.          To ignore
    Mooney   I     and   add   an   extra   judicially-created   fiscal
    impossibility defense in GA cases not only would violate
    principles of stare decisis, but would flout the will of the
    Legislature as well.
         Neither Washinaton v. Board of Suoervisors, 19 Cal.App.lth
    981 (1993), nor Board of Suoervisors v. McMahon, 219 Cal.App.3d
    286 (1990) (AOB at 26-27), suggests a different result. In
    Washinston, the trial court accepted a fiscal impossibility
_   defense, but the Court of Appeal reversed and invalidated a
    regulation restricting employable GA recipients to three months
    benefits per year.     Since the regulation at issue in Washinaton
    would be invalid whether or not a fiscal impossibility defense
    was recognized,      the appellate court expressly declined to
    decide under what, if any, circumstances a financially-strapped
    county may reduce state mandated GA expenditures.       Id. at 984
    and 984, n.2.
         In Board of Suoervisors v. McMahon, 219 Cal.App.3d 286,
    the court reversed a preliminary injunction that had required
    the state to fund Butte County's portion of its AFDC                  ’

    obligations.     While repeating general legal maxims such as
    "'The law never requires impossibilities'n (ia. at 299), the
    opinion falls far short of embracing a fiscal impossibility
    defense to state-mandated obligations.      See, e.a., ia. at   300

    ("To the extent that this dispute involves a conflict between
                                    -320
,




    statewide priorities     and local priorities,   the statewide

    priorities must prevail.").    Rather, the court concluded that
    Butte County fell far short of meeting any guidelines for such
    a defense.
         Even if Board could be read by implication as endorsing a
    version of a      fiscal impossibility defense--albeit a very
    stringentversion-- the decision would be distinguishable. That
    case merely tested whether Butte County or instead the state
    would pay a portion of AFDC grants (A at 294), not whether
    the portion would be paid at all.     The Court of Appeal had no
    occasion to consider Mooney I's prohibition against counties
    using adverse fiscal conditions as an excuse to avoid meeting
    mandatory public assistance obligations to indigents.
         In summary, recognition of a fiscal impossibility defense
    at this stage would be prematureI and conflict both with
    controlling rulings of the California Supreme Court and recent
    legislation.
         IV.     NO STATUTES PREVENT A RETROACTIVE BENEFITS AWARD
         None of the recently enacted statutes relied upon by the
    County prohibits an award of retroactive benefits.
                 A.   Beetion 17000.5's In-Kind Provisions Do Not
                      Preclude a Retroactive Benefits Award.
         The County argues that because S17000.5 permits a GA grant


         l7 In this respect, Washinoton, 19 Cal.App.4th 981, and
    Board, 219 Cal.App.3d 286, are also distinguishable. In each
    of those cases, one could reasonably estimate the costs at
    stake for the county, which would vary only insofar as monthly
    caseloads varied. In contrast to the case at bar, in neither
    case would a court have to speculate on how many people are
    likely to hear about and step forward to make a claim for
    benefits they were eligible for several years ago.
                                   -33-
.




    to include in-kind aid no cash debt is owed. AOB at 25.         This

    does not follow.      Regardless of how the County's grant miuht
    have been structured from 1993-1995,1e in fact almost all of
    the grant was paid in cash, and the County illegally reduced
    the cash portion.     The County must pay retroactive benefits in
    cash.
                 B.   B.B. 681's Permission for Counties to ImDlement
                      a Health Care Credit Does Not Chancre the Law as
                      it Existed in Oardner I, and Therefore Does Not
                      Preclude Retroactive Benefits.
       The County relies upon S.B. 681's amendment of S17000.5
    which, effective January 1, 1997, permits counties to include
    within their GA grants and thus subtract from the grants "the
    monthly actuarial value of up to forty dollars ($40) per month
    of medical care".      The County argues that retroactive benefits
    should not have been awarded because this Court's "statutory
    interpretation       ...   had been expressly disavowed.V@ AOB at 28.
    The argument is mistaken for three major reasons.
            First, a 1996 Legislature would have no power to @tdisavowl@
    a final judicial interpretation of legislation enacted in 1991
    and amended in 1992.          "The right to construe a preexisting
    statute belongs to the judiciary."          Cal. Emp. Stab. Corn. v.
    Chichester etc. Co., 75 Cal.App.2d 899, 901 (1946); accord,

         I* Even if benefits had been paid entirely in-kind, Gardner
    z would require that the value of those benefits be at least
    $294 per month excluding health care. Providing just $221 in
    non-health care benefits in-kind would have been just as
    illegal as the County's actual grant ($212 in cash plus a $9
    clothing allowance (ia. at 206)), and would compel a
    retroactive benefits award. Leach v. Swoao, 35 Cal.App.3d at
    689 (court affirmed cash retroactive benefits award to disabled
    public assistance recipient whose allowance for attendant care
    services had been reduced, rejecting argument that "gervices
    gannot be retroactivelv purchased.") (Emphasis in original.)
                                       -34-
,




    Peoole v. Cuevas, 111 Cal.App.3d 189, 199 (1980) ("[I]t is the
    duty of this court, when such a question of law is properly
    presented, to state the true meaning of the statute finally and
    conclusively                ...   .I’)   (emphasis added by Cuevas court)
        (citations and internal quotation marks omitted). The "amended
    statute defines the law for the future, but it cannot define
    the law for the past."               &    at 200.
                 Equally important, S.B.         681 does not even attempt to
    declare Gardner I wrongly decided.                  When the Legislature seeks
    to state its view of past law, it knows how to do so, as the
    history of §17000.5 itself demonstrates.                   Section 17000.5(a)
    permits counties to adjust GA grants in an amount equal to "any
    adjustment" in statewide AFDC grants.                   When a dispute arose
    over the definition of "any adjustment," the Legislature in
    1992 amended S17000.5 not only to define what "any adjustmentV1
    lVincludesIV in the future, but also to define what the phrase
    "prior to the addition of this subdivision, included                     . . . .‘I

    §17000.5(d),         added by Stats.          1992, ch. 721, Sl (emphasis
    added).          See also Cal. Emo. Stab. Corn., 75 Cal.App.Zd at 901
    (where Legislature stated that a new law was intended to be a
    'I\clarification' of the original intention of the Legislature
    .    .   .    and   ...   shall be construed for all purposes as though
    it had always read as hereinabove set forth.'").
                 S.B. 681 does none of these things. It merely changes the
    law prospectively, and thus has no retroactive effect.                 Rewman
    V.       Emerson Radio Core.,             48 Cal.3d 976,    978 (1989) (the
    "'principle that statutes operate only prospectively, 'while
    judicial decisions operate retrospectively, is familiar to
                                               -35-
    every law student. 'I*) (citation omitted).
         The County cites System Federation v. Wright, 364 U.S. 642
    (1961) [AOB at 293, but that case only underscores plaintiffs'
    position.         In   System   Federation,   the   Court held that

    legislation contrarytothe prospective provisions of a consent
    decree required modification of that decree.        At the   same time,
    the Court did not apply the statute retroactively; the decision
    left intact a damages award that was part of the consent
    decree.     Id.   at 644-45.    See also Pennsylvania v. Wheelina and

    Belmont Bridae Co., 59 U.S. (18 How.) 421, 436 (1856) (relied
    upon by Svstem Federation, 364 U.S. at 649-50), holding that
    while the plaintiff could not enforce an executory decree that
_   was no longer consistent with statutory law, it could enforce
    a cost award.
         Third, even prospectively, S.B. 6810nly partially affects
    the result in Gardner I, and vindicates much of this Court's
    reasoning.        At stake in this case was a $73 reduction in GA
    benefits based on health care received by GA recipients (34
    Cal.App.4th at 204), which the County says could have been even
    higher.     AOB at 5.     By contrast, all that S.B. 681 permits is
    a $40 reduction.
          The major thrust of this Court's opinion is that both the
                                                                                 ’
    Legislature and even the County itself have always treated the
    obligation to provide indigent health care differently from
     other subsistence needs.          Gardner, 34 Cal.App.4th at 216-26.

     By contrast, the County argued to the Supreme Court         that   health
     care was like any other subsistence need, and that the intent
     of the legislation amending S17000.5 "was to eliminate all
                                        -36-
.




    service requirements previously mandated on counties for health
    and welfare programsVV.   III J.A. 682-83 (excerpt from Petition
    for Review) (emphasis in original).
         Not only did the Supreme Court apparently reject this

    argument, but so did the 1996 Legislature. S.B. 681 treats
    health care differently from all other subsistence needs.
    Provision of any other in-kind benefit to a recipient, such as
    free housing, entitles a county to subtract the full value of
    that benefit from the recipient's GA grant.          Oberlander v.
    County of Contra Costa, 11 Cal.App.4th at 545-46 (upholding
    county policy of subtracting $10 per day from the grant of
    persons living in shelters).    By contrast, S.B. 681 limits the
    amount a county may subtract for the provision of health care
    to $40 per month, far lower than actual costs.
         In a similar vein, §17000.5 imposes an absolute cap on a
    county's duty to provide for food, housing or other non-health
    care needs.    By contrast, S.B. 681 states that S17000.5      "is
    not intended to either limit or expand the extent of the duty
    of counties to provide health care."    S17000.5(a). Thus, the
    Legislature has confirmed the view of this Court that health
    care requires different treatment.
         S.B. 681, in summary, does not cast doubt on the award of
    retroactive benefits.
              c.    The CoUtY Has 100 161amedv   in   this   case mder
                    Beetion 17000.6.
         The County makes the amazing assertion that "[u]nder
    section 17000.6,   retroactive benefits must not be ordered
    against a county found to be in significant financial distress

                                   -37-
as a matter of law."     AOB at 17; --L at 25-26.
                                    see also id                    The
simple answer is that S17000.6 says no such thing.                 The
statute, even as recently amended, merely permits a county to
lower its GA grants to 40% of the 1991 federal poverty level
for 36 months after the Commission makes a finding of
significant financial distress.        S17000.6(a)-(b), as amended by
Stats. 1996, ch. 206, S33.
     "Words may not be inserted in a statutory provision under
the guise of interpretation." Kirkwood v. Bank of America, 43
Cal.2d 333,     341 (1954).     Section 17000.6 says absolutely
nothing about prohibiting retroactive benefit awards and cannot
possibly be interpreted to require that result.
           D.    A Retroactive Benefits Award is Consistent with
                 Statutory Policy.
     Finally,   the County resorts to a policy argument that
permitting a back benefits award would be inconsistent with the
purposes behind SS17000.5 and 17000.6 to save counties money.
AOB at 29-30.   Statutes, however, "are seldom crafted to pursue
a single goal, and compromises necessary to their enactment may
require   adopting means      other than those that would most
effectively pursue the main goal."            &andaraf v.   US1 Film
Products, 511 U.S. 244, 114 S.Ct. 1483, 1508 (1994) (civil
rights act not intended to be applied retroactively even though
it glwill frequently be true" that retroactive application would
fulfill the statutory purpose more fully). a Gardner I, 34
Cal.App.4th at 222, n. 20 ("we fail to see why the Legislature
could not have intended to give counties partial relief            ...

Legislatures    makes   compromises of       this   kind    in   every

                                -38-
legislative        session   . . . .))).                                 .

          Where there' is not even an arguable interpretation that
SS17000.5 and 17000.6 foreclose retroactive benefits, the
County is not saved by references to the purposes behind those
statutes.
          v.   GARDNER I MDBT BE APPLIED RETROACTIVELY SO AS TO
               GIVE EFFECT TO A BTATUTORY RULE TEAT HIAD PRDVIOUBLY
               BEEN MIBCONB'I'RDED
          The County argues that the decision in Gardner I should
not be applied retroactively.              AOB at 39-40.   The County is

mistaken.      'ITThe general rule that judicial decisions are given
retroactive effect is basic in our legal tradition."'                Wooslev

V.    State of California, 3 Cal.4th 758, 793 (1992). Though the
rule is not absolute, "exceptions are limited."             Id. at 794.

          To determine whether a decision is retroactive, courts
must make
          'Ia threshold inquiry: does the decision establish a
          new rule of law? If it does, the new rule may or
          may not be retroactive . . .; but if it does not,
          'no question of retroactivity arises,' because there
          is no material change in the law . . . .@I

Id-   I   citing People v. Guerra, 37 Cal.3d 385, 399 (1984).
"An example of a decision which does not establish a new rule
of law is one in which we give effect Ito a statutory rule that
the courts had heretofore misconstrued . . .'"                Wooslev, 3
Cal.4th at 794 (citations omitted).
          Under this standard, Gardner I did not announce a "new
rule" as defined in Woosley.                  All Gardner x did was give
"effect to a statutory rule that the courts"                  (or,    to be
precise, one superior court) "had heretofore misconstrued."
          Assuming for the sake of argument that Gardner I did
                                       -39-
establish a new rule,
      a second question arises: was there a prior rule to
      the contrary? . . . if there was not, the new rule
      applies in all cases not yet final. This is so for
      the obvious reason that there cannot have been any
      justifiable reliance on an old rule when no old rule
      existed.
Peonle v. Guerra, 37 Cal.3d at 399 (emphasis in original).
      In this case, there was no "old rule" contrary to Gardner
I
_.   The County's policy of deducting health care from GA grants
had not been approved by any appellate court.     Since there was
no "old rule" on which the County could justifiably rely, this
Court's decision must be applied retroactively.
      Lemon v. Kurtzman, 411 U.S. 192 (1973) (AOB at 34-36),
does not aid the County's cause.      In Lemon, after the Supreme
Court invalidated on constitutional grounds a state scheme for
funding private schools, the District Court refused to enjoin
state expenditures to those schools for services that had
already been provided.     The Supreme Court affirmed, relying
upon numerous factors inapplicable here:      the plaintiffs had

sat on their rights, withdrawing their motion for preliminary
relief (id. at 196-97, 204-05); the private schools had relied
upon the plaintiffs' tactical decisions (a at 205-06); the
case involved "the appropriate scope of federal equitable
remedies" concerning a state statute (& at 199); and the
trial court had exercised its "broad discretionary power" in
favor of the state (ia. at 200).
      In this case, plaintiffs vigorously sought preliminary
relief and a writ, there are no federalism concerns, there is
no private party reliance and the trial court exercised what

                               -4o-
discretion it has in favor of plaintiffs.               Lemon does not
apply   l
              See also New York v. Cathedral Academy, 434 U.S. 125,
130 (1977), clarifying that Lemon cannot be construed to mean
"that       every    ...   unconstitutional statute, like every dog,
gets one bite,        if anyone has relied on the statute to his
detriment."         The trial court appropriately held that under
controlling California law, Gardner I "does not establish a new
rule of lawI' and thus must be applied retroactively.           V J.A.
1082-83.
        VI.    NONE OF TEE      COUNTY'8   PROCEDURAL   ARGUMENTS   ARE
               MERITORIOUS
        The County asserts three procedural arguments, all of them
erroneous.       First, the County contends that plaintiffs may not
recover retroactive benefits because the complaint did not seek
them.       AOB at 17-18.      Plaintiffs, of course, could not have
sought retroactive benefits when the complaint was filed in
August of 1993 (I 1st J.A. 1) since the County's illegal policy
had not yet gone into effect.              Under identical procedural
circumstances, the Court of Appeal in Boehm v. Superior Court,
178 Cal.App.3d at 503-04,           ordered payment of retroactive
benefits to GA recipients who had been erroneously denied
preliminary relief.lg
        The County, however, asserts that plaintiffs should have
amended their complaint to seek back benefits before moving for

     lg The County's attempts to distinguishBoehm on procedural
grounds misstate the facts in Boehm. Contrary to the County's
characterization (AOB at 22, 42), Boehm was not filed as a
mandate action to recover wrongfully withheld benefits, but
rather as an action for injunctive relief to prevent illegal
grant reductions. 170 Cal.App.3d at 497.     Mandate was sought
in the Court of ADDeal.
   summary judgment.        AOB at 19.     The County has waived this
   argument by failing to assert it in the proceedings below.        "An
   appellate


          below.V1                          Steven W. v. Matthew S., 33
   Cal.App.4th 1108, 1117 (1995).        The "explanation is simply that
                                                                  partv to
   take advantage of an error on appeal when it could easily have
   been corrected at the trial."      Doers v. Golden Gate Bridae Etc.
   Dist., 23         Cal.3d 180,   184-85, n.1    (1979)   (emphasis in
   original).         Assuming for the sake of argument that the
   complaint needed to amended, plaintiffs could readily have done
- so   if the County called this problem to our attention.          The
   County may not assert this purported error for the first time
   on appeal.
          In addition,     failure to amend the complaint did not
   preclude plaintiffs from seeking retroactive benefits.        IlIt is
   the usual rule that in a contested case plaintiff may secure
   relief justified by the allegations of the complaint and the
  evidence, even though the relief is greater than or different
  from that demanded." Sinaleton v. Perry, 45 Cal.2d 489, 498-99
   (1955); see also 3 Witkin, Cal. Procedure, "Pleading," S449 at
  492 (3d ed. 1985) (in a contested case "a prayer which seeks
  the wrong relief or fails to demand adequate relief is not a
  serious defect.").
          The Court in Sinaleton noted this rule is sometimes based
  on the inclusion in most complaints of a prayer "'for such
  other and further relief as to the Court may seem just and
                                    -42-
.




    proper,".     45 Cal.2d at 499.        The complaint in this case
    included such a prayer (I 1st J.A.               I8),   which justified
    plaintiffs in seeking retroactive benefits once the denial of
    their motion for preliminary injunction had been reversed.
         Moreover,     courts   are reluctant to impose procedural
    barriers to restoration of benefits lost because of an
    erroneous trial court order.     "The power of a court whose order
    or judgment has been reversed to order restoration after
    reversal is inherent in that court.        ...    Thus, that power of
    the court and the right of the party prevailing on the appeal
    to have it exercised exist indenendentlv of the recuest for its
    exercise."     Schubert v. Davis, 30 Cal.2d 785, 789 (1947)
    (emphasis added).
         In the cases relied upon by the County (AOB at 17-18),
    courts held that parties seeking summary judgment could not
    assert facts, new causes of action or new defense theories that
    were not pled in their complaints or answers.             None of those
    cases dealt with a mere omission from a prayer for relief, and
    none concerned restoration of benefits after reversal of an
    erroneous order.     Our case has always concerned one fact--the
    County's grant reduction based on the cost of health care--and
    one legal issue:    the validity of that policy. The motion for
    summary judgment did not deviate from that, and was therefore             ’

    proper.
         Next, the County, again for the first time on appeal,
    argues that plaintiffs should have filed a claim for money
    damages under the Government Torts Claims Act, Gov. Code SS910
    & seu.      AOB at 2.   The argument is precluded by Government
                                    -43-
Code S905(e)    ,   which specifically exempts from the claim filing
requirement "claims for any form of public assistance under the
Welfare and Institutions Code or other provisions of law
relating to public assistance programs                . . . .I)

     Third, the County claims the trial court's order granting
summary judgment failed to comply with Code of Civil Procedure
S437c(g), which requires a court granting summary judgment to
state its reasons and to refer @Iif applicable" to supporting
and opposing evidence.        AOB at 14.      The trial court's order did
state its reasons for granting summary judgment:                    (1) the only
relevant facts-- the existence and dates of the County's policy
at issue--were undisputed; and (2) the policy had been declared
illegal in Gardner I.          V ,?.A. 948.     The trial court was not
required to refer to evidence concerning issues that the court
properly deemed irrelevant.
     Moreover, purported defects in a statement of reasons are
not fatal where meaningful appellate review                        is possible.
Goldrich   v.       Natural    Y   Suraical     Snecialties,          Inc., 25
Cal.App.4th 772, 782 (1994) ("even assuming that, ideally, a
further statement ought to have been given, there is no harm
where, as here, our independent review establishes the validity
of the judgment ."); W.       F. Havward   Co. v. Transamerica Ins. Co.,
16 Cal.App.4th 1101, 1111 (1993).            The trial court's statement
of reasons was quite adequate for purposes of appellate review.
     The County's procedural as well as its substantive
objections to the retroactive benefits award are unfounded.
     VII. TEE       AWARD OF PREJUDWENT       IMTERBST WAS        PROPER

     The County objects to the inclusion of prejudgment
                                    -44-
c   ‘,




         1




             interest in the retroactive benefits award.             Judgment, 193-4,
             V J.A. 951-52; AOB at 40-44.         As in Boehm, 178 Cal.App.3d at
             504, the award of prejudgment interest was proper.
                   Civil      S3287
                              Code    authorizes        payment     of   prejudgment
             interest in public benefit cases when there is an underlying
             monetary     obligation,     the recovery can be calculated with
             certainty and the right to recovery vests on a particular day.
             Triww V.SWOaW,   17 Cal.3d at 682.
                   As in Triww and Boehm, all three requirements are readily
             met here.     First, GA, as briefed above, is a debt due as of the
             date the applicant or recipient is first entitled to aid.
             Moonev II,       26 Cal.App.3d at 434-36.       Second,     in a welfare
             scheme with "fixed payment schedulesl' calculation "becomes a
             mechanical exercise of applying the appropriate standard of
             assistance."       Triww,   17 Cal.3d at 682.         While the overall
             amount of retroactive benefits that will be claimed cannot be
             predicted, the amount to be paid to each person is easy to
             calculate.       Judgment, j[4, V J.A. 964.      Finally,     each class
             member's right to recovery vests on "the first date of his
             entitlement".      Triww, 17 Cal.Sd at 683.          This case meets the
             criteria for a prejudgment interest award.
                  Most of the County's objections to prejudgment interest
             merely repeat the County's arguments against awarding any
             retroactive benefits at all; and therefore do not merit a
             separate response.          In addition,    the County contends that
             prejudgment interest may not be awarded unless benefits were
             Wrongfully withheld".          AOB at 40-41.          If'by Wrongfully
             withheld" the County means that prejudgment interest may only
                                               -45-
be awarded when there is a finding of bad faith, the County is
wrong.    Nothing in the language of Civil Code S3287, Trinn, or
Boehm would support such a construction.            In Trino and in
Boehm, the courts awarded prejudgment interest after concluding
that the government illeaallv withheld benefits, and did not
make further inquiries into the government's good or bad faith.
The trial court properly reached the same result in this case.
      VIII.      TEE   TRIAL COURT DID WOT ABUSE ITS DISCRETION IN
                  ISSUING A PERMANENT INJUNCTION.

      The trial court          issued a permanent    injunction     that
prohibits the County from reducing GA grants to reflect the
cost of health care "unless and until legislation goes into
effect that expressly authorizes such reductions" and then
prohibits     reduction of grants beyond the extent of that
authorization.     Judgment, q2, V J.A. 951.
      "The granting       ..   .   [of] a permanent injunction rests
within the sound discretion of the trial court and will not be
disturbed on appeal absent a showing of a clear abuse of
discretion."     San Dieao Union v. Citv Council, 146 Cal.App.3d
947, 952 (1983).       The County cannot demonstrate abuse.
      The County argues that the injunction was moot when
entered because the policy at issue had been changed.             AOB at
44.      When a policy change is pursuant to a court order,
however, the issue of injunctive relief is far from moot.
nCompliance with a court order is not voluntary discontinuance
of prohibited conduct."            Feminist Women's Health Center v.
Dlvthe, 32 Cal.App.Qth 1641, 1659 (1995) (permanent injunction
affirmed even though defendants had complied with preliminary

                                     -46-
 injunction); Phiops v. Saddleback Valley Unified School Dist.,
 204     Cal.App.3d   1110,   1119    (1988)   (permanent
                                                      injunction
 requiring district to permit student with A.I.D.S. to remain in
 school affirmed on ground that the student's "attendance [at
 the time of trial] was permitted solely because it was mandated
 by the preliminary injunction.").
        The County rescinded its grant reduction only after this
Court directed the trial court to issue a preliminary
 injunction, the Supreme Court had denied review, remittitur had
been issued and plaintiffs had noticed an ex parte application
to issue an injunction.        Before that time, plaintiffs were
repeatedly unsuccessful in obtaining voluntary compliance, even
after Gardner I was issued.    Rothschild Dec., 114-6, V J.A.
936-37.      Under such circumstances, the trial court did not
abuse its discretion in issuing an injunction.
        S.B. 681's authorization of a $40 health care credit does
not discredit the injunction.           The injunction was issued on
April 24, 1996, more than eight months before S.B. 681 was
scheduled to go into effect.
        Contrary to the County's argument         (AOB at 46), the
injunction does not '*prohibit[ J an action that the Legislature
has clearly authorized." The injunction prohibits reduction in
GA   grants to account for health care costs "unless and until
legislation goes into effect that expressly authorizes such
reductions", (V J.A. 951),     thus   insuring that its terms would
be consistent not only with S.B. 681, but with any modification




                                 -47-
 or repeal of that statute."        The trial court did not abuse
 its discretion in issuing injunctive relief.

                            CONCLUSION
      For the    foregoing reasons,       the judgment should be
affirmed.
      Dated:   January 10, 1997.
                           Respectfully submitted,


                           By:
                                        RICHARD A. ROTHSCHILD
                           Attorneys for Plaintiffs/Respondents




     20
         The injunction referred to the possibility of
legislation generally rather than to S.B. 681 in particular
because in the turbulent world of GA legislation, it can never
be assumed that any legislation is permanent.
                                                    m, e.cr.,
Tavlor v. Countv of Contra Costa 48 Cal.App.lth 1709, 1712-13
--
1713, n.2 (1996) (noting that 'legislation authorizing grant
reductions for unrelated persons sharing housing was enacted,
repealed and reenacted, all within a four-year period).
                                 -48-
                      PROOF OF SERVICE BY MAIL


     I,     MARTHA K. HARPER                    , declare:
     I am a resident of the County of Los Angeles; I am over the
age of eighteen years and not a party to the within entitled
action; my business address is 3701 Wilshire Blvd., Suite 208,
Los Angeles, California        90010-2809.
     On Januarv 13. 1997        ,   I served the within
                    RESPONDENTS' BRIEF


on the interested parties in said action by placing a true copy
thereof enclosed in a sealed envelope with postage thereon fully
prepaid, in the United States mail at Los Angeles, California,
addressed as follows:
     PATRICK A. W-U                                  CLERK
     PRINCIPAL DEPUTY COUNTY COUNSEL                 SUPERIOR COURT
     ADA TREIGER                                   111 No. Hill St.
     SENIOR DEPUTY COUNTY COUNSEL                    Los Angeles, CA
     648 HALL OF ADMINISTRATION                      90012
     500 WEST TEMPLE STREET
     LOS ANGELES, CA 90012
                       One CORY on computer disk
                       personallv delivered to:
                       CALIFORNIA SUPREME COURT
                       300 So. Spring Street
                       Los Angeles, CA 90017

     I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.
     Executed this      13th        day of     January    ,   1997 at Los
Angeles, California.


                                             @RTHAK.HARPER

								
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