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Salera v. Caldwell

Supreme Court of Hawaii

May 11, 2016

NARCIS D. SALERA; GLENN E. COMPANION; UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO; JOHN DOES 1-10; AND JANE DOES 1-10, Respondents/Plaintiffs-Appellees/Cross-Appellants,
v.
KIRK W. CALDWELL, Mayor, City and County of Honolulu; CAROLEE C. KUBO, Director, Department of Human Resources, City and County of Honolulu; LORI M. K. KAHIKINA, Director, Department of Environmental Services, City and County of Honolulu; and CITY AND COUNTY OF HONOLULU, Petitioners/Defendants-Appellants/Cross-Appellees, and JOHN DOES 1-10; JANE DOES 1-10; DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10; ROE NON-PROFIT ORGANIZATIONS 1-10; AND ROE GOVERNMENTAL ENTITIES 1-10, Defendants.

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CAAP-15-0000106; CIV. NO. 14-1-2655-12)

Donna Y. L. Leong and Ernest H. Nomura for petitioners

Herbert R. Takahashi and Rebecca L. Covert for respondents

Kimberly Tsumoto Guidry and Girard D. Lau for amicus curiae, State of Hawai'i

RECKTENWALD, C.J., NAKAYAMA, POLLACK, AND WILSON JJ., AND CIRCUIT JUDGE GARIBALDI, IN PLACE OF McKENNA, J., RECUSED

OPINION

POLLACK, J.

This case concerns the decision of the Department of Environmental Services of the City and County of Honolulu to discontinue frontloader collection services to 181 multi-unit residential buildings and non-profit organizations. We address whether the elimination of these government services is prohibited by constitutional merit principles under Article XVI, Section 1 of the Hawai'i Constitution and civil service statutes.

I. BACKGROUND

Frontloader collection services[1] are part of the City and County of Honolulu's (City and County) solid waste collection and disposal system, regulated pursuant to Hawai'i Revised Statutes (HRS) § 340A (2010) and Chapter 9 of the Revised Ordinances of the City and County of Honolulu (ROH). The Department of Environmental Services (the Department) is the county agency responsible for administering the collection and disposal of refuse. HRS § 340A-3; ROH § 9-1.3(a) (1990).

In 1998, United Public Workers, AFSCME, Local 646, AFL-CIO (collectively, UPW)[2] and the City and County entered into a Memorandum of Agreement in which the City and County agreed, inter alia, to the following: (1) restore collection services on O'ahu that had previously been privatized; and (2) expand frontloader collection services to businesses, condominiums, and churches. This agreement was enforced through proceedings before the Hawai'i Labor Relations Board. Several appeals ensued in which the Circuit Court of the First Circuit (circuit court) ordered the City and County to cease and desist from repudiating the agreement with UPW and honor in good faith the agreement's terms. After unsuccessfully appealing the circuit court's order to this court, the City and County restored frontloader refuse collection services to multi-family properties and non-profit organizations that had previously been privatized. For approximately the last ten years, six front-end loader work crews, consisting of refuse collection crew leaders and refuse collectors from the Honolulu, Pearl City, and Kapa'a baseyards, have utilized seven front-end loader trucks to service 1, 615 dumpsters twice a week for 181 multi-family residences and nonprofit properties as well as for 51 City agencies.[3]

In July 2014, following the City Council's decision to no longer provide funds for the procurement of front-end loader collection vehicles, the Department's Director Lori Kahikina decided to discontinue frontloader collection services to the 181 multi-unit residential properties and non-profit organizations, effective January 31, 2015. The Department sent notices to the affected properties, which included a list of contact information for fourteen private haulers who potentially might be able to provide refuse collection services. The 181 entities were urged to "make arrangements with a private refuse hauling company for [replacement] service[s]" and were asked to inform the City and County if they intended to "shift to private hauling services sooner than January 31, 2015."

The Department also advised UPW by letter regarding the discontinuance of the frontloader collection services to the 181 properties. The Department cited to the "unfair distribution of city service[s] and resources" and "diminishing resources, " including "insufficient equipment to continue the service[s] and no prospects of being able to acquire additional equipment, " as reasons for discontinuing frontloader collection services. Additionally, the Department reassured UPW that "[a]ll employees will retain their current positions and yard assignments, and will continue to perform work in accordance with their position descriptions. Front loader service will continue to be provided to approximately 50 City agency facilities."

In a responsive letter, UPW objected to the decision to end frontloader collection services, stating that the Department's "unilateral decision" violates "the duty to negotiate and to obtain mutual consent" pursuant to various agreements. UPW maintained that the City and County had not negotiated any modifications to the mutual agreement to restore and expand refuse collection services. Accordingly, UPW requested negotiations and asked the City and County to cease and desist from discontinuing frontloader refuse collection services and to suspend notification of the cancellation of these services pending negotiations. UPW also sought responses to an information request included in its letter.

In its reply to UPW's information request, the Department recognized that there were some monetary savings to ending this government service but cited "general equity and non-monetary concerns" as the primary reasons for its decision to discontinue frontloader refuse collection services. In a subsequent letter to UPW, the City and County indicated, inter alia, that "any impact will be nominal, as all employees will continue their employment and will continue to be based at their existing baseyard. Impacted employees' rate of pay and benefits will remain the same, and their scope of work remain as manual collection." The City and County declined to rescind any notices of the discontinuation of refuse collection services to the affected properties.

Of the 181 properties, 116 entered into contracts with private licensed collectors. One of the licensed collectors had at least 41 locations with pending contracts while another had at least 63 pending contracts.

A. Complaint

On December 31, 2014, Narcis Salera, Glenn Companion, and UPW (collectively, the Union) sued the City and County of Honolulu, Mayor Kirk W. Caldwell, Human Resources Director Carolee C. Kubo, and Director Kahikina (collectively, the City) in circuit court. The Complaint stated four claims: (1) a violation of constitutional merit principles under Article XVI, Section 1 of the Hawai'i Constitution (count 1); (2) a violation of civil service laws pursuant to HRS § 46-33 (count 2); (3) a violation of the right to collective bargaining under Article XIII, Section 2 of the Hawai'i Constitution (count 3); and (4) a violation of public policy and ultra vires contrary to the judgment entered in Civil Nos. 03-1-0546-03 and 03-1-0552-03 (count 4). The Union provided the 181 affected entities with a copy of the Complaint.

B. Injunction Order

On January 13, 2015, the Union filed a motion for a temporary restraining order and a preliminary injunction (Injunction Motion) seeking to enjoin the City from unilaterally implementing the privatization of the frontloader collection and disposal services at issue. The City opposed the motion, contending that its decision to discontinue frontloader collection services did not constitute impermissible privatization but was instead a non-justiciable political question. A notice of the Injunction Motion and hearing was sent to the 181 properties and non-profit organizations. The circuit court granted the Union's Injunction Motion by written order entered on January 30, 2015 (Injunction Order), concluding that the Union demonstrated a strong probability of success on the merits of the alleged violations of merit principles (counts 1 and 2).

The circuit court found that for approximately the last ten years, the City and County has provided refuse collection services through the use of six front-end loader work crews, consisting of refuse collection crew leaders and refuse collectors, to service 1, 615 dumpsters twice a week for the 181 properties and numerous City agencies. The court determined that the refuse collection services for the 181 properties have historically and customarily been performed by civil servants employed by the City and County pursuant to HRS § 46-33 and the merit principles under Article XVI, Section 1 of the Hawai'i Constitution. Further, the court found that the City had not sought or obtained the required certifications or approvals required to exempt the refuse collection services from the civil service system and that there were no statutory exemptions that apply to the positions or personal services in question.

The circuit court stated that the decision to discontinue these services was made, inter alia, by Director Kahikina and that "general equity and non-monetary concerns" were the primary reasons for the decision. The court determined that the City Council did not adopt an ordinance or resolution to require the City and County to discontinue the public refuse collection services to the 181 properties and that the civil servants on front-end loader crews are available to provide these services on or after January 31, 2015. The court found that the City and County notified the 181 properties of its intent to discontinue the frontloader collection services effective January 31, 2015 and urged the owners to "make arrangements with a private refuse hauling company for (replacement) services."

The circuit court also determined that the nature of the services provided by the refuse collection crew leaders and refuse collectors are "virtually identical" to the services provided by private hauling companies' truck drivers and collectors. The court further determined that unless it granted the injunction, then the City and County's decision would "eliminate three (3) of the six (6) front end loader work crews, reassign refuse collection crew leaders and refuse collectors to new routes, and reduce the City's frontloader collection services by approximately 89 percent on January 31, 2015." Although frontloader collection services would continue for 51 City agencies, the court found that the City and County's decision to terminate these services to the 181 properties will "directly impact at least 13 civil servants and result in irreparable injury" to the Union. The court stated that there was no evidence presented indicating that granting the injunction would cause irreparable injury to the City.

The circuit court then examined the merit principles under Article XVI, Section 1 of the Hawai'i Constitution and the civil service laws at HRS §§ 76-77 and 46-33. To determine whether privatization was involved, the court applied the nature of services test set forth in Konno v. County of Hawai'i, 85 Hawai'i 61, 937 P.2d 397 (1997), which the court summarized as follows: "services that have been customarily and historically provided by civil servants cannot be privatized absent a showing that civil servants cannot provide those services or that the services are subject to a specific statutory exemption." The circuit court concluded that the City and County's "cancellation" of frontloader collection services was "in effect a shift from government provision of functions and services to provision by the private sector" and thus constituted impermissible privatization. The court further noted that it was undisputed that the services provided by the civil service employees would have been replaced by private businesses and observed that the City and County contemplated this when it decided to terminate the refuse collection services to the 181 properties.

Additionally, the court reasoned that the personal services provided by the refuse collection crew leaders and refuse collectors are within the civil service unless one of the exemptions of HRS §§ 46-33 and 76-77 applies. Because the City did not assert the applicability of an exemption and because no exemptions apply, the court concluded that the front-end loader work crew positions are within the civil service and thus governed by Article XVI, Section 1 of the Hawai'i Constitution. Accordingly, the court ruled that, based on the evidence presented, the Union demonstrated a strong probability of success on counts 1 and 2.

The circuit court rejected the City's contention that this case involves a non-justiciable political question. The court reasoned that "as the privatization of the front end loading services is a prohibitive practice which does not allow for negotiations, only legislative action may alter the civil service statutes through ...


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